Which of the Following Statements Concerning the Classification of Deferred

question 26

Multiple Choice

Which of the following statements concerning the classification of deferred tax assets and liabilities is false?

• A) A deferred tax asset is classified as noncurrent if the company expects the future tax benefit to be received more than 12 months from the balance sheet date.
• B) A deferred tax asset related to a bad debt reserve is classified as noncurrent if the company expects the bad debt to be charged off more than 12 months from the balance sheet date.
• C) A deferred tax asset related to a bad debt reserve is classified as current if the related accounts receivable is classified as a current asset.
• D)A deferred tax asset related to inventory capitalization is classified as noncurrent if the company uses a FIFO accounting method and the inventory to which the deferred tax asset relates will not be treated as sold within 12 months from the balance sheet date.

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Definitions:

Subliminal Sensation

The process of responding to stimuli that are below the threshold of conscious awareness.

Interpret Loudness

The process of perceiving and understanding the intensity or volume of sound.

Hair Cell's Response

The reaction of specialized sensory cells in the inner ear that convert sound vibrations into neural signals which are then interpreted by the brain.

Activated Hair Cells

In the inner ear, these are sensory cells activated by sound vibrations which play a key role in transforming sound waves into electrical signals for the brain to interpret.