Using Straight-Line Depreciation for Financial Reporting Purposes and MACRS for Tax

question 1

Multiple Choice

Using straight-line depreciation for financial reporting purposes and MACRS for tax purposes in the first year of an asset's life creates a:

• A) Future deductible amount.
• B) Permanent difference not requiring inter-period tax allocation.
• C) Deferred tax asset.
• D) Deferred tax liability.

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Definitions:

Cognitive Explanation

An understanding that focuses on internal mental processes such as perception, memory, thought, and problem-solving to explain behavior.

Vicariously

Experiencing something indirectly or through the feelings or actions of another person, often used in the context of learning or emotion.

Observational Learning

The process of learning behaviors by watching and imitating others, without direct instruction or reinforcement.

Observational Learning

A learning process through watching the actions of others and imitating those actions.