Which of the Following Is a Temporary Difference Classified as a Revenue

question 83

Multiple Choice

Which of the following is a temporary difference classified as a revenue or gain that is taxable after it is recognized in financial income?

• A) Subscriptions received in advance.
• B) Prepaid royalty received in advance.
• C) An installment sale accounted for on the accrual basis for financial reporting purposes and on the installment (cash) basis for tax purposes.
• D) Interest received on a municipal obligation.

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Definitions:

Assembly Worker

An individual employed in the manufacturing sector whose primary role involves assembling components or products.

Mixed Costs

Expenses that have both a fixed and a variable component, changing with the level of production or sales activity but also including a constant element.

Period Costs

Selling and administrative expenses incurred in marketing the product, delivering the product, or managing the company and not directly related to manufacturing the product.

Fixed Costs

Expenses that do not change in total regardless of changes in the volume of goods or services produced or sold.