1)A change in accounting method does not require consideration of the income tax impact if it only

increases or decreases deferred tax assets/liabilities (True / False)

2)Deferred taxes are recorded to account for permanent differences (True / False)

3)An increase in the Deferred Tax Liability account on the balance sheet is recorded by a DEBIT to the

Income Tax Expense account (True / False).

4)A valuation account is needed whenever it is judged to be more likely than not a deferred tax liability will

not be realized (True / False)

4)A change in calculation of deferred taxes due to a change in enacted tax rates is considered a change in

accounting estimate and corrected prospectively

(True / False)

5)Prior years' financial statements are restated when the prospective approach is used.

(True / False)

6)Elective changes in accounting principle require disclosures explaining the impact of and justifying the

change (True / False)

7)Companies are required to disclose all related party transactions including potential future transactions

discussed at board of director meetings. (True / False)

8)The most desirable audit opinion a company can receive is a qualified opinion (True / False).