Which of the Following Types of Evidence Indicate That a Valuation

question 110

Multiple Choice

Which of the following types of evidence indicate that a valuation allowance is needed to reduce the deferred tax asset?

• A) history of profits
• B) excess of appreciated asset values over basis
• C) existing contracts or sales backlogs, which will generate significant future income
• D) short carryback or carryover periods

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Definitions:

Normal Cost

The standard expenses incurred during the production of goods or services, including direct labor, materials, and overhead costs.

Crash Cost

The extra expense incurred to reduce the duration of a project, often through the addition of resources or overtime work.

Normal Time

Normal time is a measure of the time required to complete a task or operation under normal working conditions, often used in time and motion studies to set standards and expectations.

Crash Duration

The shortest possible time to complete a task or project phase by allocating maximum resources, often resulting in increased costs.