USGAAP and IFRS Require Complex Procedures in Accounting for Income

question 113

Multiple Choice

U.S.GAAP and IFRS require complex procedures in accounting for income taxes.Complexities in the accounting for income taxes include(s)

• A)income tax rates change over time, so the deferred tax liability need not represent the amount of taxes that the firm must pay later.
• B)some temporary differences create deferred tax assets.
• C)some temporary differences create deferred tax liabilities.
• D)firms recognize deferred tax assets only to the extent that they expect to generate sufficient taxable income to realize the assets in the form of tax savings in the future.
• E)all of the above

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Definitions:

Arctic Foxes

A small mammal native to the Arctic regions, known for its thick fur that changes color with the seasons.

Emergent Property

A property or quality that arises as an effect of complex interactions and interdependencies among components within a system, which cannot be predicted solely from knowledge of the individual parts.

Independent Variable

The variable in an experiment that is manipulated or changed to observe its effect on the dependent variable.

Dependent Variable

In an experiment, a variable presumed to be influenced by the independent variable being tested.