Which of the Following Would Result in a Deferred Tax

question 3

Multiple Choice

Which of the following would result in a deferred tax asset?

• A)Warranty provision.
• B)Point of sale revenue recognition for the books, and cost recovery method of revenue recognition for tax.
• C)Rent received in advance.
• D)Using straight-line depreciation for the books and accelerated depreciation for tax.

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Definitions:

Outstanding Shares

The total number of shares of a corporation's stock that are currently owned by all shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers.

Common Stock Dividend Distributable

A liability on the balance sheet representing the amount of dividends that have been declared by the company but not yet paid to shareholders.

Liability Account

A financial accounting term for obligations or debts that a company owes to others.

Stock Dividend

A dividend paid to shareholders in the form of additional shares of stock, rather than cash.