On December 31, 2017, XYZ Inc

question 49

Multiple Choice

On December 31, 2017, XYZ Inc. has an account receivable of $2,000 for consulting fees it earned during the year. Consulting revenues are only taxable when collected. XYZ normally receives payment for the services rendered one month after the client is invoiced. Assuming a 20% tax rate, these revenues shall result in:

• A) a deferred tax liability of $2,000.
• B) a deferred tax liability of $400.
• C) a deferred tax asset of $400.
• D)a deferred tax asset of $2,000.

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Definitions:

Elbow

A joint that connects the forearm to the upper arm, allowing for a range of movements including bending and straightening.

Closer

Positioned near or nearer to the end of a process, sequence, or lifecycle, often implying a role in concluding or finalizing.

Body Structure

The physical and anatomical makeup of a living organism, including its organs, tissues, and cells.

Cells

The basic structural, functional, and biological units of all living organisms, serving as the building blocks of life.