Which of the Following Usually Results in an Increase in a Deferred

question 83

Multiple Choice

Which of the following usually results in an increase in a deferred tax liability?

• A)Accrual of estimated operating expenses
• B)Revenue collected in advance
• C)Prepaid operating expenses
• D)All of these are correct.

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Definitions:

Cost Structure

The composition of fixed and variable costs that a company incurs in the process of producing goods or services.

Operating Leverage

A gauge of the relationship between sales growth and the growth of operational earnings, showing the mix of fixed and variable costs within a business.

Financial Leverage

The use of borrowed funds to finance investments, aiming to increase the potential return to equity holders.

Business Risk

The exposure a company or investor faces from uncertainties that may impact its operations and profitability.