An Incidental Beneficiary Is Best Described as a Person

question 5

Multiple Choice

An incidental beneficiary is best described as a person:

• A) whom parties intended to benefit.
• B) who is a third-party beneficiary and for whom performance is a gift.
• C) to whom the promisee owes an obligation or duty.
• D) who unintentionally benefits from performance of contract.

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Definitions:

Temporary Difference

Differences between accounting income and taxable income that are expected to reverse in the future, affecting deferred tax calculations.

Permanent Difference

Transactions that cause a difference between the tax basis and the book value of assets and liabilities, which will not reverse over time.

Interperiod Tax Allocation

The process of allocating income taxes over different accounting periods due to temporary differences between financial accounting and tax reporting.

Intraperiod Tax Allocation

The process of allocating income taxes between different parts of the financial statements within the same fiscal period.