Which of the Following Is an Example of a Fixed

question 133

Multiple Choice

Which of the following is an example of a fixed cost for a manufacturer?

• A)Income Taxes
• B)Machine Repair Expense
• C)Fire Insurance on buildings
• D)Delivery Fuel Expense

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Definitions:

Deferred Tax Assets

Future tax benefits obtained due to temporary differences between the book value and tax basis of assets.

Deferred Tax Liabilities

Obligations for taxes owed in the future due to temporary differences between the tax basis of an asset or liability and its reported amount in the financial statements.

Book Income Tax Expense

The amount of income tax a company reports in its financial statements, which may differ from the tax owed to tax authorities.

Deferred Tax Asset

An accounting term for items that reduce future tax liability because of temporary differences between the book value and the tax value of assets and liabilities.