Which of the following is not a potential source of accounting distortion?

a. Restated prior year's income statement for discontinued operation.

b. Change of useful life of production facility.

c. Amortization of copyright.

d. Cut in employees' fringe benefits.

Listed companies in Hong Kong are required to disclose the following information to the public:

I. Ageing analysis of accounts receivable

II. Ageing analysis of accounts payable

III. Ageing analysis of inventory

IV. Fair value of all notes issued

a. I, II

b. I, II, III

c. I, II, IV

d. I, II, III, and IV

Winner Company has net temporary differences between tax and financial accounting of $80 million, resulting in a deferred tax liability of $28 million. What would be the impact on deferred taxes and net income if the tax rate increases?

a. Increase in deferred tax liability and no effect on net income.

b. Increase in deferred tax liability and decrease in net income.

c. No effect on either deferred tax liability or net income. 

d. Decrease in deferred tax liability and no effect on net income.