Exxon recorded an expense and corresponding liability to recognize potential losses relating to an oil spill in 2006 of $10 million. Its net income for the year was $200 million. It was not able to take a deduction for tax purposes until later years when it actually paid cash out in relation to this event. In 2006, with respect to this, Exxon would have:

A. recognized a deferred tax liability

B. recognized a tax loss carryforward

C. recognized a deferred tax asset

D. recognized a deferred equity loss

The short-term liquidity of a company:

A. is only of concern to investors, not creditors, of a company B. is determinable by looking at debt to equity ratio C. depends largely upon prospective cash flows D. is determinable by calculating cash to current liabilities ratio.