CFA Practice Question

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CFA Practice Question

Generally accepted accounting principles (GAAP) require the recognition of future income tax assets and liabilities resulting from timing differences. If timing differences were ignored and tax expense was equal to current taxes payable, which accounting principle would be violated?

A. Consistency
B. Comparability
C. Historical cost
D. Matching
Correct Answer: D

The failure to recognize timing differences results in a mismatching of tax expense with related revenues and expenses.

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