When Recognizing Deferred Tax Assets and Liabilities,the Income Statement Approach

question 52

Multiple Choice

When recognizing deferred tax assets and liabilities,the income statement approach and the balance sheet approach yield identical results:

• A) when enacted tax rates applicable to future periods do not change.
• B) when the firm recognizes no valuation allowance on deferred tax assets.
• C) Both (a) and (b) are correct.
• D) None of these answers is correct.

---

Definitions:

Job Dissatisfaction

The feeling of unhappiness or discontent with one’s job or aspects of it.

Defence Mechanisms

Psychological strategies used by individuals to cope with reality and to maintain a self-image by lessening the anxiety stemming from unacceptable thoughts or feelings.

Stress Experience

The feelings and physical reactions to pressures or threats, varying in intensity depending on the individual's perception and coping mechanisms.

Perceived

Regarded in a certain way; the way in which something is understood, interpreted, or viewed by an individual or group.