1. Which of the following statements is not true about a deferred tax liability?

a. It is a present obligation

b. It results from a past transaction

c. It causes taxable income in future periods to be less than financial income

d. It represents a future sacrifice

e. None of these answers are correct

2. The purchase of a company outstanding capital stock would be reported as a ___________ in the ____________ activities section of the Statement of Cash Flows.

a. none of these answers are correct

b. cash outflow ; financing

c. cash outflow ; investing

d. cash outflow ; operating

e. cash inflow ; investing

3. FASB prohibits retrospective accounting treatment for changes in accounting estimates.

True

False