AmStore Incorporated Sold Some of Its Heavy Machinery at a Gain

question 105

Multiple Choice

AmStore Incorporated sold some of its heavy machinery at a gain. AmStore used the straight-line method for financial accounting depreciation andimmediate expensing for tax cost recovery. If accumulated depreciation for financial accounting purposes is less than accumulated depreciation for tax reporting purposes, what is the nature of the book-tax difference associated with the gain on the sale?

• A)Permanent; favorable.
• B)Permanent; unfavorable.
• C)Temporary; favorable.
• D)Temporary; unfavorable.

---

Definitions:

Retributive

Pertaining to or advocating for retribution; the philosophy that punishment for wrongdoing should be proportional and serve as a morally justified response to the offense.

Social Change

Transformations in the structure and functioning of a society over time, often related to cultural, economic, or political developments.

Consensus

A general agreement or harmony of opinions among members of a group, achieved through collective decision-making processes.

Retributivist

A philosophical theory of justice that believes in punishment because the offender deserves it, focusing on past crimes rather than future consequences.