Which of the Following Arguments Is Supportive of Allocation of Income

question 65

Multiple Choice

Which of the following arguments is supportive of allocation of income taxes?

• A) Future predictions of net income are enhanced when income taxes are allocated.
• B) Income tax expense computed under interperiod tax allocation is a better predictor of future cash flows than income taxes actually paid.
• C) Income tax is not an expense;it is a sharing of profits with government.
• D) Income tax expense based on actual payments is more understandable to users than allocated income taxes.

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Definitions:

Saving Rate

The saving rate is the proportion of income that is not spent on consumption, but rather set aside for future use, often expressed as a percentage of total income.

Current Account Deficits

A situation where a country's total imports of goods, services, and transfers are greater than its total exports, indicating a nation is spending more abroad than it is earning.

Foreign Ownership

The situation where companies or assets are owned by investors or entities based outside the country in which the companies operate or the assets are located.

Net Inflow

The difference between the amount of money or resources entering and leaving a system or economy over a specific period.