Explain how comprehensive allocation differs from partial allocation.
What will be an ideal response?
ANSWER:
With comprehensive allocation, tax allocation must take place as long as timing differences arise, despite the possibility of relevant circumstantial differences. Thus, comprehensive allocation is an example of rigid uniformity.
Under partial allocation, only those deferred credits that can reasonably be expected to reverse in the foreseeable future on an aggregate basis are recorded on the books. Thus, income tax expense for a given year is defined as the total tax costs attributable to the given year’s operations, costs that will be levied against the firm, both in the current and future years, on a gross or aggregate basis. The resulting deferred tax credit is more clearly definable as a liability since it represents the amount expected to be paid in the future. Partial allocation is an example of finite uniformity.
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Which of the following statements is FALSE?
a. Liability understatements are easier to detect than other types of financial statement fraud. b. Analytical symptoms related to accounts payable understatements usually relate to reported balances that appear too low. c. A seasoned fraud examiner will look for unusual liability account changes to detect fraud. d. Companies in trouble have a strong motivation to understate liabilities.
Cases involving speech which is considered subconscious is often referred to as ______________ and is usually not considered a protected form of speech:
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Fill in the blank(s) with correct word