The Attitude of the Financial Accounting Standards Board Toward Deferred

question 92

Multiple Choice

The attitude of the Financial Accounting Standards Board toward deferred tax liabilities is that they are

• A) an amount that results in a future obligation and meets the definition of a liability.
• B) a bookkeeping item that is used merely to maintain equality of the accounting equation.
• C) not true liabilities because the balance increases every year.
• D) not payable in the immediate future so it not necessary to record them.

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Definitions:

Controlled Entities

Entities over which another entity has the power to govern financial and operating policies, typically through ownership of a majority voting interest.

Government Organization

An entity that is part of the government and is responsible for the administration and governance of a specific function or area.

Tangible Capital Assets

Physical, long-term assets held for business use and not expected to be converted to cash in the short term, such as buildings and machinery.

Business Enterprises

Organizations engaged in industrial, commercial, or professional activities, aiming to generate profits.