Due to Differences Between Depreciation Reported in the Income Statement

question 132

Multiple Choice

Due to differences between depreciation reported in the income statement and depreciation deducted for tax purposes, Lucas Corp. has $2 million in temporary differences that will increase taxable income next year. Assuming that Lucas has no other temporary differences, deferred income taxes should be reported in this year's ending balance sheet as a:

• A) Current deferred asset.
• B) Noncurrent deferred tax liability.
• C) Current deferred tax liability.
• D) Noncurrent deferred tax asset.

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Definitions:

Parameters

Quantitative characteristics that define or summarize features of a population in statistical analysis.

Numerical Characteristics

Quantitative attributes or measurements that describe and summarize data.

Sample

A selected subset of individuals or items from a larger population used to estimate characteristics of the whole population.

Sampling Error

The error caused by observing a sample instead of the whole population, leading to potential differences between the sample statistic and population parameter.