There Is No Recognition of a Deferred Tax Item in Respect

question 26

Multiple Choice

There is no recognition of a deferred tax item in respect to Goodwill because it is a residual amount and the recognition of a deferred tax item would:

• A) decrease the carrying amount of Goodwill;
• B) increase the carrying amount of Goodwill;
• C) decrease the profit on consolidation;
• D) increase the profit on consolidation.

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Definitions:

Flexible Budget Report

A financial report comparing actual results to a budget that adjusts based on the actual level of output or activity, allowing for more meaningful analysis.

Variable Costs

Expenses that change in proportion to the level of production or business activity.

Level of Activity

A measure of the volume of work or production capacity a business entity engages in over a specific period.

Employee Salaries and Wages

Payments made to employees for their labor, including both fixed salaries and variable wages.