Which of the Following Is an Example of a Temporary

question 39

Multiple Choice

Which of the following is an example of a temporary difference, which could result in a deferred tax asset?

• A)Use of straight-line depreciation for accounting purposes and an accelerated rate for income tax purposes
• B)Prepayments of expenses in year of payment; recognition of expense for accounting purposes occurs in a later year.
• C)Gain on disposal of an asset when included in taxable income before it is included in pre-tax accounting income
• D)Gross margin on instalment sales is recognized for accounting purposes before it is included in taxable income in the income tax return

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Definitions:

Plains Indians

Native American peoples who inhabited the Great Plains of the United States and Canada, known for their nomadic lifestyles and reliance on the buffalo.

Small Horses

Generally refers to horse breeds that are smaller in size, often including miniature horses and ponies.

Buffalo

Large, furry animals native to North America, also known as bison, which played a central role in the lives of Native American tribes.

Hybrid Cultures

The blending of elements from different cultures to create new, unique cultural forms or practices.