What Adjustment Is Required to the Opening Deferred Taxes as a Result

question 14

Multiple Choice

What adjustment is required to the opening deferred taxes as a result of the rate change?

• A) 40,000 debit
• B) 40,000 credit
• C) 130,000 credit
• D) 190,000 credit

---

Definitions:

Net Income

The total profit of a company after all expenses, including taxes, have been subtracted from total revenues.

Operating Expenses

Costs associated with running the day-to-day operations of a business, excluding costs related to production or manufacturing.

Advanced Company

A designation often used to describe a business that operates with significant technological advancements or innovative products compared to competitors.

Absorption Costing

Absorption costing is an accounting method that includes all manufacturing costs - direct labor, direct materials, and both variable and fixed manufacturing overhead - in the cost of a product.