Which of the Following Items Will Not Create a Deferred

question 106

Multiple Choice

Which of the following items will not create a deferred tax liability?

• A) Operating loss or tax credit carryforwards exist.
• B) Expenses or losses are deductible earlier for tax purposes than for book purposes.
• C) Revenues or gains are recognized earlier for book purposes than for tax purposes.
• D) Tax basis of an asset is less than its book basis.

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Definitions:

Partnership

A partnership is a legal form of business operation between two or more individuals who share management and profits. The specific rules can vary depending on the agreement and the jurisdiction.

Profits Share

An agreement or policy where a portion of a company's profits is distributed to employees, shareholders, or partners.

Partnership Act

Legislation that outlines the rights and responsibilities of partners in a business partnership.

Profits

The financial gain realized when the revenue generated from business activities exceeds the expenses, taxes, and costs associated with sustaining the operations.