Which of the Following Differences Between Financial Accounting and Tax

question 14

Multiple Choice

Which of the following differences between financial accounting and tax accounting ordinarily creates a deferred tax asset?

• A) Depreciation early in the life of an asset.
• B) Unrealized gain from recording investments at fair value.
• C) Subscriptions collected in advance.
• D) None of these answer choices are correct.

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Definitions:

Delegation of Duties

The process of assigning specific responsibilities or tasks to another individual, often within an organizational setting.

Promisee

In a third-party beneficiary contract, the party to the contract who owes something to the promisor in exchange for the promise made to the third-party beneficiary.

Third-Party Beneficiary

A recipient of contractual benefits who is not one of the contracting parties; created when two parties enter into a contract with the intended purpose of benefiting a third party.

Creditor Beneficiary

A third party that benefits from a contract made between two other parties, especially in terms of having the right to claim performance or compensation.