Windsor Company Has Net Temporary Differences Between Tax and Book

question 7

Multiple Choice

Windsor Company has net temporary differences between tax and book accounting of $80 million, resulting in a deferred tax liability of $28 million. An increase in the tax rate would have the following impact on deferred taxes and net income: $$\begin{array} { | l | c | c | } \hline & \text { Deferred Taxes } & \text { Net Income } \\\hline \text { A) } & \text { Increase } & \text { No effect } \\\hline \text { B) } & \text { Increase } & \text { Decrease } \\\hline \text { C) } & \text { No effect } & \text { No effect } \\\hline \text { D) } & \text { Decrease } & \text { No effect } \\\hline\end{array}$$

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D

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Definitions:

Consequence

The result or effect of an action or condition.

Voluntary Behaviors

Actions undertaken by choice and without external coercion, reflecting autonomy and personal preference.

Antecedents

Factors or events that exist or occur before a specific behavior, showing a causal relationship.

Classical Conditioning

A method of learning that involves forming connections between a stimulus from the environment and one that occurs naturally.