When Recognizing Deferred Tax Assets and Liabilities,the Income Statement Approach

question 52

Multiple Choice

When recognizing deferred tax assets and liabilities,the income statement approach and the balance sheet approach yield identical results:

• A) when enacted tax rates applicable to future periods do not change.
• B) when the firm recognizes no valuation allowance on deferred tax assets.
• C) Both (a) and (b) are correct.
• D) None of these answers is correct.

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Definitions:

Enuresis

Repeated urination in clothing or in bed.

Bladder

A hollow muscular organ that stores urine excreted by the kidneys before it is discharged from the body.

Bedwetting

Involuntary urination while asleep after the age when bladder control usually occurs, clinically known as nocturnal enuresis.

Sleep Terrors

A sleep disorder causing feelings of terror or dread, and typically involving screaming, flailing, or panic during sleep.