Starbucks provides initial consulting services to its licensees and rights to operate a Starbucks store. These are distinct performance obligations. Starbucks satisfies the consulting obligation and receives the initial fee once the initial consulting services are substantially performed. Starbucks receives royalty revenue based on a percentage of product sales of the licensee. How are these revenue streams recognized?

a. The initial fee is recognized at a point in time and the royalty revenue is recognized over time.

b. The initial fee is recognized over time and the royalty revenue is recognized at a point in time.

c. Both are recognized over time.

d. Both are recognized at a point in time.

Income tax expense (i.e., the provision for income taxes) equals:

a. Current taxes payable + the increase in deferred tax liabilities + the increase in deferred tax assets.

b. Current taxes payable the increase in deferred tax liabilities + the increase in deferred tax assets.

c. Current taxes payable + the increase in deferred tax liabilities the increase in deferred tax assets.

d. Current taxes payable the increase in deferred tax liabilities the increase in deferred tax assets.

Net operating loss carryforwards:

a. have no tax consequences.

b. reduce current taxes payable.

c. are deferred tax assets.

d. are deferred tax liabilities.

In the calculation of pension expense, how does the expected return on plan assets affect net income and other comprehensive income?

a. It increases both.

b. It increases only net income.

c. It increases only other comprehensive income.

d. It increases neither.