PHRASE TERM 1. A "plug" for the net effect of the current tax liability and changes in deferred tax assets and liabilities. 2. No tax consequences. 3. "More likely than not" test. 4. Produces future taxable amounts or future deductible amounts. 5. Noncurrent.

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Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the number for the most correct term.

Terms: Balance sheet classification, Income tax expense, Permanent difference, Temporary difference, Valuation allowance

1. A "plug" for the net effect of the current tax liability and changes in deferred tax assets and liabilities.

2. No tax consequences.

3. "More likely than not" test.

4. Produces future taxable amounts or future deductible amounts.

5. Noncurrent.

1. A "plug" for the net effect of the current tax liability and changes in deferred tax assets and liabilities.

Income tax expense

2. No tax consequences. Permanent difference

3. "More likely than not" test. Valuation allowance

4. Produces future taxable amounts or future deductible amounts. Temporary difference

5. Noncurrent. Balance sheet classification

Explanation:

1. A "plug" for the net effect of the current tax liability and changes in deferred tax assets and liabilities. Income tax expense.

A deferred tax asset could be used to lessen taxable income.

A deferred income tax liability is the result of the difference between the income tax expense in the income statement and the income tax payable.

2. No tax consequences. Permanent difference

because

Since a permanent difference can never be erased, it won´t create deferred taxes.

3. "More likely than not" test. Valuation allowance

A valuation allowance is required agains a deferred tax asset if it´s "more likely than not" that part or even all of the deferred tax asset won´t be realized.

4. Produces future taxable amounts or future deductible amounts. Contrary to the permanent difference case, a temporary difference will produce future taxes.

5. Noncurrent. Balance sheet classification

Noncurrent assets appear in a balance sheet as investment, property, plant, equipment, intangible assets.

i believe that it is a 45% chance.

i guess you could put raise the economic balance