Which of the Following Temporary Differences Creates a Deferred Tax

question 67

Multiple Choice

Which of the following temporary differences creates a deferred tax asset in the year in which it originates?

• A)Accelerated tax depreciation in excess of straight-line book depreciation.
• B)Prepayment income reported as income on the tax return prior to being reported as income on the financial income statement.
• C)Gain reported on the income statement prior to being reported on the tax return.
• D)Prepayment deduction reported on the tax return prior to being reported on the income statement.

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Definitions:

Neural Connections

The links between neurons in the brain through which they communicate with each other.

Long-term Potentiation

A lasting increase in signal transmission between two neurons that results from their simultaneous activation, believed to be a cellular mechanism underlying learning and memory.

Neurons

Specialized cells in the nervous system that transmit information through electrical and chemical signals.

Prefrontal Cortex

The frontmost region of the frontal lobes in the brain, involved in complex cognitive behavior, personality expression, decision making, and moderating social behaviour.