1. Legislation was recently passed resulting to changes in income tax rates. The effect of the legislation on deferred tax balances should:

Group of answer choices

Result in an adjustment of deferred tax balances in the year the legislation was enacted

Be reported as a prior period adjustment, restating previously issued financial statements

Be disclosed, but will not result in any adjustment of deferred tax balances

None of the above

2.

A net operating loss cannot be carried-back to prior periods, and will therefore be carried-forward. A carry-forward of a net operating loss will result in:

Group of answer choices

A current tax receivable for the tax refund to be received

A deferred tax asset, net of any valuation allowance

A deferred tax liability

None of the above