Which of the Following Statements Is True

question 63

Multiple Choice

Which of the following statements is true?

• A)A change in capitalized inventory costs under §263A always produces an increase in a deferred tax asset.
• B)A change in capitalized inventory costs under §263A always produces a decrease in a deferred tax asset.
• C)A change in capitalized inventory costs under §263A can produce an increase or a decrease in a deferred tax asset.
• D)A change in capitalized inventory costs under §263A always produces a permanent difference.

---

Definitions:

Credits

Accounting entries that increase liabilities or equity or decrease assets, representing the opposite effect of debits in the double-entry bookkeeping system.

Contra Account

An account used in the general ledger to reduce the value of a related account when the two are netted together.

IFRS

The International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide the preparation of financial statements globally.

U.S.GAAP

United States Generally Accepted Accounting Principles; a set of accounting standards used in the U.S. for financial reporting.