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Unformatted text preview: 4. What should Tringali report as its income tax expense for its first year of operations? A. $120,000. B. $114,000. C. $106,000. D. $8,000. 5. The valuation allowance account that is used in conjunction with deferred tax assets is a(n): A. Liability. B. Component of shareholders' equity. C. Asset. D. Contra asset. 6. In reconciling net income to taxable income, interest earned on municipal bonds is: A. Ignored. B. A temporary difference. C. A reversing difference. D. A permanent difference. 7. A deferred tax asset represents a: A. Future income tax benefit. B. Future cash collection. C. Future tax refund. D. Future amount of money to be paid out. 8. In the statement of cash flows, using the indirect method for determining cash flows from operating activities, a decrease in deferred tax liabilities is: A. Added to net income. B. Subtracted from net income. C. Ignored. D. Included under financing activities....
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- Spring '09
- Generally Accepted Accounting Principles