What Causes the Creation of a Deferred Tax Account on the Balance

question 3

Multiple Choice

What causes the creation of a deferred tax account on the balance sheet?

• A) Permanent differences in income tax accounting.
• B) The use of the straight-line method of depreciation for both reporting and tax purposes.
• C) Temporary differences in the recognition of revenue and expense for taxable income relative to reported income.
• D) Municipal bond revenue and life insurance premiums on officers.

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Definitions:

Indifference Curve

A graph representing different combinations of two goods that provide the same level of utility or satisfaction to the consumer.

Apples

A common fruit that comes in many varieties and is used in numerous culinary preparations, also often referenced as a basic economic good in examples.

Bananas

A type of edible fruit produced by various kinds of large herbaceous flowering plants in the genus Musa.

Utility Function

Represents a consumer's preference ranking for various bundles of goods, articulating the level of satisfaction received.