Which Tax Rate Should Be Used to Calculate the Deferred

question 3

Multiple Choice

Which tax rate should be used to calculate the deferred tax amount?

• A)The tax rate applying when the timing difference originated
• B)The tax rate applying when the tax will become payable
• C)Either a or b is acceptable
• D)The tax rate current at the date of accounting

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Definitions:

Bank Balance

The total amount of funds available in a bank account at a given moment, including all deposits and subtracting any withdrawals.

Outstanding Checks

Checks that have been written and recorded in the accounting books but have not yet been cashed or cleared by the bank.

Month-end Bank Statement

A document provided by a bank summarizing the account’s activity and balances over the last month, used for reconciling the bank account.

Erroneously Charged

Refers to a financial transaction or fee that has been incorrectly applied to an account.