Ask Question
13 March, 14:02

If a company's deferred tax asset is not reduced by a valuation allowance, the company believes it is: Multiple Choice More likely than not that sufficient taxable income will be generated in future years to realize the full tax benefit. Probable that sufficient taxable income will be generated in future years to realize the full tax benefit. More likely than not that sufficient financial income will be generated in future years to realize the full tax benefit. Probable that sufficient financial income will be genera

+5
Answers (1)
  1. 13 March, 16:13
    0
    Probable that sufficient taxable income will be generated in future years to realize the full tax benefit.

    Explanation:

    If a company's deferred tax asset is not reduced by a valuation allowance, the company believes it is more likely than not that: Sufficient taxable income will be generated in future years to realize the full tax benefit.

    A valuation allowance is a contra-account to a deferred tax asset account which shows the amount of deferred tax asset with a more than 50% probability of not being utilized in the future due to the non-availability of sufficient future taxable income. Valuation allowance is just like a provision for doubtful debts.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “If a company's deferred tax asset is not reduced by a valuation allowance, the company believes it is: Multiple Choice More likely than not ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers