问题
单项选择题
Which of the following statements best describes the impact of a valuation allowance on the financial statements A valuation allowance:（）
A. increases reported income, reduces assets, and reduces equity.
B. reduces reported income, reduces assets, and reduces equity.
C. increases reported income, increases liabilities, and reduces equity.
答案
参考答案：B
解析：
A valuation allowance is a contra account (offset) against deferred tax assets that reflects the likelihood that the deferred tax assets will never be realized. The establishment of a valuation allowance reduces reported income, offsets (reduces) assets, and reduces equity.