Which of the Following Would Cause a Deferred Tax Expense

question 32

Multiple Choice

Which of the following would cause a deferred tax expense?

• A) Write-down of goodwill due to impairment
• B) Use of equity method where undistributed earnings of a 30 percent owned investee are related to probable future dividends
• C) Premiums paid on insurance carried by company (beneficiary) on its officers or employees
• D) Income is taxed at capital gains rates

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Definitions:

Discount Period

The time frame in which a discount is offered for early payment on goods or services, or the period before a financial instrument reaches maturity.

Full Settlement

A financial agreement where all claims or debts between parties are resolved by paying a single lump sum.

Discount Period

The timeframe in which a discount is offered for early payment of invoices, encouraging quicker payment from buyers.

Inventory Shrinkage

The loss of products between acquisition and sale, often due to theft, damage, or errors in counting.