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Assessment question #8
Which statement would be appropriate when performing testing over a deferred (temporary difference) balance?
Answer the question, then select Confirm
A. The deferred balance related to the bad debt provision agrees directly to the trial balance, so no further testing would be deemed
necessary.
B. The deferred balance related to accrued salaries and wages agree directly to the trial balance, so no further testing would be
deemed necessary.
C. The deferred balance related to depreciation agrees directly to the trial balance, so not further testing would be deemed
necessary.
D. The deferred balance related to goodwill agrees directly to the trial balance, so no further testing is deemed necessary.
Confirm

Sagot :

The statement that would be appropriate when performing testing over a deferred or the temporary difference balance will be C. The deferred balance related to depreciation agrees directly to the trial balance, so not further testing would be deemed necessary.

What is a deferred balance?

The whole amount of the income statement effect is represented by the deferred tax balance on the balance sheet. In the temporary difference approach, the difference between the tax base and asset's accounting carrying value is used to determine the deferred tax balance.

By contrasting the carrying value of an asset or liability with its tax base, the temporary difference arising in respect of that asset or liability is determined. Temporary discrepancies that are taxable result in deferred tax liabilities

In this case, when performing testing over a deferred or the temporary difference balance will be that the deferred balance related to depreciation agrees directly to the trial balance, so not further testing would be deemed necessary.

In conclusion, the correct option is C.

Learn more about balance on:

https://brainly.com/question/24852569

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