Which of the Following Is an Example of a Temporary

question 59

Multiple Choice

Which of the following is an example of a temporary difference that would result in a deferred tax liability?

• A) Use of straight-line depreciation for accounting purposes and an accelerated rate for income tax purposes
• B) Rent revenue collected in advance when included in taxable income before it is included in pretax accounting income
• C) Use of a shorter depreciation period for accounting purposes than is used for income tax purposes
• D) Investment losses recognized earlier for accounting purposes than for tax purposes

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Definitions:

Highly Technical

Relating to or requiring specialized knowledge or skills in a field, especially in science or engineering.

Avoided

Refers to actions or situations that are deliberately not engaged with or confronted.

Disagreement Signals

Behavioral or verbal cues indicating a difference in opinion or dissatisfaction.

Unplanned Situation

an unexpected event or circumstance that arises without forethought or anticipation, often requiring immediate attention or action.