When Pretax Accounting Income Exceeds Taxable Income

question 69

Multiple Choice

When pretax accounting income exceeds taxable income:

• A) Deferred Tax Asset is debited.
• B) Deferred Tax Liability is credited.
• C) Prepaid Income Tax is credited.
• D) Prepaid Income Tax is debited.

---

Definitions:

Processing Mill

A facility where raw materials are processed, refined, or transformed into finished products through various mechanical or chemical procedures.

Transportation Costs

The expenses associated with moving goods from one location to another, including fuel, labor, and maintenance of vehicles.

Composite Score

An aggregated score that combines several individual scores or measures to form a single summary statistic.

Sensitivity

The degree to which a system's output depends on the input or how changes in input can affect the output in modeling and analysis.