Valuation allowance question
I had this question on my schweser qbank and I did not get it why the answer is not C? can someone explain it to me please?
Which of the following situations will most likely require a company to record a valuation allowance on its balance sheet?
A) A firm is unlikely to have future taxable income that would enable it to take advantage of deferred tax assets.
B) To report depreciation, a firm uses the double-declining balance method for tax purposes and the straight-line method for financial reporting purposes.
C) A firm has differences between taxable and pretax income that are never expected to reverse.
Correct answer: A
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