Which of the Following Is an Example of a Temporary

question 85

Multiple Choice

Which of the following is an example of a temporary difference which would not result in a deferred tax asset?

• A)Unrealized loss on short term investment is recognized for accounting purposes during the holding period while the actual loss on date of disposal is used for tax purposes.
• B)Use of sales method of revenue recognition for accounting purposes, and instalment method of revenue recognition for tax purposes.
• C)Estimated loss on disposal of a segment of a business recognized for accounting purposes but reported on the income tax return later on the basis of the actual loss.
• D)Allowance method for doubtful accounts is used for accounting purposes while direct write-off is required for tax purposes.

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Definitions:

Stakeholders

Groups, other than the company’s shareholders, that are affected by corporate decisions. Stakeholders include employees, customers, creditors, suppliers, and the community in which the corporation operates.

Tender Offer

A public offer made by a person, company, or entity to purchase a substantial portion of another company's shares or bonds.

Voting Shares

Stocks that grant the holder the right to vote on corporate matters at shareholders' meetings.

Poison Pill

a defense strategy used by companies to prevent or discourage unwanted takeover attempts by making the company less attractive to the acquirer.