Which of the Following Temporary Differences Creates a Deferred Tax

question 39

Multiple Choice

Which of the following temporary differences creates a deferred tax liability?

• A)Accumulated tax depreciation in excess of book depreciation on a building.
• B)Accumulated tax amortization in excess of book amortization on a customer list.
• C)Compensation expensed for book purposes but deferred for tax purposes.
• D)Both accumulated tax depreciation in excess of book depreciation on a building and accumulated tax amortization in excess of book amortization on a customer list create a deferred tax liability.

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Definitions:

More Distant

Describes a relationship, observation, or connection that is less direct, less personal, or further removed in space or time.

Readily Available

Something that is easily obtainable or accessible without significant effort or obstruction.

Value Rationality

A decision-making process focused on achieving a specific goal in a consistent, logical manner, irrespective of the personal utility gained.

Traditional Action

A term often associated with Max Weber, referring to actions motivated by established habits or customs rather than rational calculations or ethical considerations.