Which of the Following Statements Is True

question 18

Multiple Choice

Which of the following statements is true?

• A) ASC 740 focuses on the income tax expense or benefit on the income statement.
• B) ASC 740 focuses on the balances in the deferred tax assets and liabilities on the balance sheet.
• C) ASC 740 focuses on the income taxes paid or refunded in the Statement of Cash Flows.
• D) ASC 740 focuses on the computation of a company's effective tax rate in the income tax note to the financial statements.

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Definitions:

Governmental Fund Financial Statements

Financial reports that focus on the sources, uses, and balances of governmental funds and provide insight into fiscal accountability.

Proprietary Funds

Funds used by a governmental entity to account for activities similar to those found in private businesses, where the determination of net income, financial position, and changes in financial position is necessary.

For-Profit Organizations

Entities that operate with the primary goal of earning profit, distributing earnings to owners or shareholders.

Fiduciary Funds

Financial resources administered by a trustee or fiduciary on behalf of individuals or entities, following specific guidelines and for a specific purpose.