A Deferred Tax Asset Exists When ________

question 128

Multiple Choice

A deferred tax asset exists when ________.

• A) the book basis of assets is greater than the tax basis of assets
• B) the book basis of liabilities is greater than the tax basis of liabilities
• C) the book basis of assets is equal to the tax basis of assets
• D) the book basis of liabilities is less than the tax basis of liabilities

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Definitions:

Dividend Payout Ratio

A financial metric that shows the percentage of a company's earnings paid to shareholders in the form of dividends.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds a company's costs, commonly used to assess profitability.

Projected Addition

An estimate or forecast of the future increase in a specific metric such as revenue, profits, or assets.

External Financing

Funding obtained from outside of a company, rather than from its own earnings, to support its operations or growth. This can come from debt, equity, or other financial instruments.