A Deferred Tax Asset Would Result If

question 12

Multiple Choice

A deferred tax asset would result if

• A) a company recorded a tax penalty in 2014 that it paid in 2015
• B) a company recorded more taxable depreciation in 2014 for an asset acquired in 2008
• C) a company recorded more warranty expense in 2014 than cash paid in 2014 for warranty repairs
• D) a company recorded more interest revenue in 2014 than cash received in 2014 for interest

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Definitions:

Ending Balance

The amount in an account at the end of an accounting period after all debits and credits have been accounted for.

Asset (A)

Resources owned by a company that have economic value and can provide future benefits.

Liability (L)

Financial obligations, debts, or responsibilities the company owes to others, measurable in monetary terms.