Permanent and Reversible Differences

question 1

Essay

Permanent and reversible differences
Listed below are items that are treated differently for accounting purposes than they are for tax purposes. Indicate whether the items are permanent differences or reversible differences. For reversible differences, indicate whether they will create deferred tax assets or deferred tax liabilities.
1. Investments accounted for by the equity method (investment income exceeds dividends received)
2. Advance rental receipts
3. Membership costs for executives at a local golf club
4. Estimated future warranty costs
5. Excess of pension contributions over pension expense
6. Expenses incurred in obtaining tax-exempt revenue
7. Instalment sales
8. Excess CCA over accounting depreciation
9. Long-term construction contracts
10. Premiums paid on life insurance of officers (company is the beneficiary)
11. Penalty assessed by CRA for late submission of income tax return

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Definitions:

Behaviorism

A theory of human development that studies observable actions. Behaviorism is also called learning theory, because it describes how people learn to do what they do.

Induction

A disciplinary technique in which the parent tries to get the child to understand why a certain behavior was wrong. Listening, not lecturing, is crucial.

Bullying

A form of aggressive behavior characterized by repeated acts of physical, verbal, or social harm intended to intimidate, harm, or ostracize another individual.

Instrumental

Pertaining to actions or tools designed to achieve a specific purpose or carry out a particular function.