On the Financial Statements, Which Line Item Connects the Balance

question 158

Multiple Choice

On the financial statements, which line item connects the balance sheet to the statement of cash flows?

• A)Owner's equity (ending balance)
• B)Net income
• C)Total assets
• D)Cash (ending balance)

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Definitions:

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.

Future Taxable Income

The income that a company or individual expects to earn in future periods that will be subject to tax.

Probability

A measure of the likelihood of a specific event happening, expressed as a number between 0 and 1.