Failure to Understand the Distinction Between Mandatory and Optional _____

question 42

Short Answer

Failure to understand the distinction between mandatory and optional _____ in relationships might yield designs in which awkward (and unnecessary) temporary rows (entity instances) must be created just to accommodate the creation of required entities.

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Definitions:

Temporary Differences

Differences between the accounting value and tax value of assets and liabilities, resulting in deferred tax assets or liabilities.

Deferred Income Taxes

Taxes that are assessed or paid on income that is recognized in one period for financial reporting purposes but in a different period for tax purposes.

Fair Value Increments

Increases in the value of an asset or security that result from a reassessment of its fair value, often reflected in financial statements to show current market conditions.

Deferred Tax Liability

A tax obligation that a company owes and will pay in the future, resulting from timing differences between the recognition of income and expenses for financial reporting and tax purposes.