Which of the Following Does Not Limit the Benefits of Deferring

question 43

Multiple Choice

Which of the following does not limit the benefits of deferring income?

• A) increasing tax rates
• B) a taxpayer with severe cash flow needs
• C) if continuing an investment would generate a low rate of return
• D) if continuing an investment would subject the taxpayer to unnecessary risk
• E) None of these

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Definitions:

Permanent Accounts

Accounts in the general ledger that are not closed at the end of the accounting period, including asset, liability, and equity accounts.

Closing Entries

Journal entries made at the end of an accounting period to transfer balances from temporary accounts to permanent accounts.

Revenue

The aggregate revenue from selling goods or services, which constitute a firm's central business functions.

Expense Accounts

Accounts used to record the consumption of assets or services that result in a decrease in owner's equity, excluding the withdrawal of business assets by the owner.