Estimated Employee Compensation Expenses Earned During the Current Period but Expected

question 135

Multiple Choice

Estimated employee compensation expenses earned during the current period but expected to be paid in the next period causes:

• A) An increase in a deferred tax asset.
• B) A decrease in a deferred tax asset.
• C) An increase in a deferred tax liability.
• D) A decrease in a deferred tax liability.

---

Definitions:

Time Value of Money

The concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Employee Morale

The overall satisfaction, outlook, and feelings of well-being that an employee holds in the workplace.

Product Quality

A measure of the attributes or characteristics of a product that fulfills the requirements, expectations, or specifications set by customers and regulations.

Net Present Value

A method used in capital budgeting to analyze the profitability of a projected investment or project by calculating the difference between the present value of cash inflows and outflows.