Which Method Reflects the Tax Effect in the Period That

question 60

Multiple Choice

Which method reflects the tax effect in the period that tax is payable?

• A)Accrual method.
• B)Taxes payable method.
• C)Deferral method.
• D)Tax allocation method.

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Definitions:

Coase Theorem

A principle that asserts that if property rights are well-defined and transaction costs are negligible, parties will negotiate to correct externalities and allocate resources efficiently.

Private Market

A private market is a part of the financial market in which investments are negotiated directly between parties, without public market listing.

Externalities

Unintended outcomes from business transactions impacting external groups, not included in the product or service pricing.

Coase Theorem

A principle that asserts that when trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property.