One Example of a Temporary Difference Between Financial and Tax

question 143

Multiple Choice

One example of a temporary difference between financial and tax reporting results from

• A)rent expense.
• B)tax-exempt interest from municipal bonds.
• C)life insurance proceeds resulting from the death of an executive.
• D)depreciation of long-term assets.

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Definitions:

Cash Short

A situation where the amount of cash on hand is less than the recorded amount, often indicating errors or theft.

Office Supplies

Consumable items that are used in offices on a day-to-day basis for administrative and office-related tasks, such as paper, pens, and staples.

Petty Cash Fund

A small amount of cash kept on hand for minor, immediate expenses to avoid the complexities of writing checks.

Missing Funds

Refers to a situation where there is a discrepancy between expected and actual funds, indicating that money might be unaccounted for or lost.