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

---

Definitions:

Karl Marx

A 19th-century philosopher, economist, and political theorist known for his critiques of capitalism and his development of the theory of communism.

Savings

Funds that are set aside by individuals or entities, often in financial institutions, for future use or investment.

Inheritance Laws

Legal statutes and regulations that govern the distribution of a deceased person's estate among their heirs or designated beneficiaries.

Middle East

A region that broadly includes countries in Western Asia and parts of North Africa, known for its strategic geopolitical significance.