The Accounting Recognition of the Benefit from a Tax Loss

question 2

Multiple Choice

The accounting recognition of the benefit from a tax loss carryforward in most situations should be reported as

• A)A reduction of the loss in the year of the loss with an appropriate valuation allowance
• B)A prior period adjustment in whichever year the benefit is realized
• C)An extraordinary item in the year in which the benefit is realized
• D)An item on the retained earnings statement,not the income statement

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Definitions:

Utilize Computers

The act of employing computers to perform tasks or solve problems, optimizing productivity and efficiency.

Information Competency

The ability to locate, gather, and organize information for use in decision-making.

Utilize Technology

The process of using technological tools and systems to improve efficiency, solve problems, and achieve objectives within various contexts.

Analyze Information

The process of examining data methodically to understand its meaning and make informed decisions.