The Classification of a Deferred Tax Asset as Current or Long-Term

question 68

True/False

The classification of a deferred tax asset as current or long-term usually depends on the balance sheet classification of the asset or liability to which it relates.

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Definitions:

Fixed Expenses

Costs that remain constant for a given period regardless of the level of production or sales, such as rent or salaries.

Variable Expenses

Expenses that change in proportion to the activity of a business.

Financial Advantage

A benefit gained in financial terms, which can result from factors such as cost savings, investment returns, or other monetary gains.

Outside Supplier

An external organization that provides goods or services to another company.