A Machine with a 10-Year Useful Life Is Being Depreciated

question 28

Multiple Choice

A machine with a 10-year useful life is being depreciated on a straight-line basis for financial statement purposes, and over 5 years for income tax purposes under the accelerated recovery cost system. Assuming that the company is profitable and that there are and have been no other timing differences, the related deferred income taxes would be reported in the balance sheet at the end of the first year of the estimated useful life as a

• A) Current liability
• B) Current asset
• C) Noncurrent liability
• D) Noncurrent asset

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Definitions:

Person Perception

The process by which individuals form judgments and impressions of other people.

Confirmation Biases

A natural tendency to look for, make sense of, value, and keep in mind details that confirm one's established beliefs or speculations.

Fundamental Attribution Error

The tendency for observers to underestimate situational influences and overestimate dispositional traits when explaining others' behaviors.

Actor-Observer Bias

A tendency to attribute one's own actions to external causes while attributing others' actions to their internal characteristics.