Shank Corporation Uses a Different Depreciation Method for Its Income

question 115

Multiple Choice

Shank Corporation uses a different depreciation method for its income tax return than it does for its income statement. Consequently, the corporation has a credit balance in its Deferred Income Taxes account. This balance should be classified as a

• A) current asset.
• B) long-term liability.
• C) current liability.
• D) long-term asset.

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Definitions:

Drug Tolerance

A physiological state where the effectiveness of a drug decreases as a result of repeated use, leading to a need for increased doses to achieve the same effect.

Economic Factors

Elements that influence the performance of economies, including inflation, employment levels, GDP growth, and interest rates.

Social Bias

Prejudice or unfounded judgment toward individuals or groups based on societal stereotypes.

Theory Of Mind

One’s awareness that other people base their behaviors on their own beliefs, intentions, and mental states, not on information they have no way of knowing.