Differences Between the Carrying Amounts of an Entity's Net Assets

question 24

Multiple Choice

Differences between the carrying amounts of an entity's net assets determined under accounting standards, and the tax bases of those net assets, are described as:

• A) temporary differences;
• B) permanent differences;
• C) tax losses;
• D) the current income tax liability.

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Definitions:

Reliable

Pertains to the consistency of a measure or instrument; if the results are repeatable under the same conditions.

Valid

Refers to the extent to which a concept, conclusion, or measurement is well-founded and corresponds accurately to the real world.

Criterion Validity

Criterion validity refers to how well one measure predicts an outcome based on the criteria of another measure.

Future Setting

A scenario or context that is projected or anticipated to occur in a forward time frame.