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Question
When tax expense equals current taxes payable to the IRS plus (minus) the increase (decrease) in deferred tax liabilities, tax expense is properly matched for the
A. current period.
B. previous period.
C. future period.
D. tax return.
Answer
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Because covenant compliance can be jeopardized by mandated changes in accounting principles, many loan agreements have financial covenants that rely on the accounting rules in place when the loan is first granted.
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A. base salaries.
B. short-term incentives.
C. long-term incentives.
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B. affirmative covenants.
C. negative restrictions.
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B. borrowers.
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