Which of the Following Differences Between Financial Accounting and Tax

question 110

Multiple Choice

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

• A) Tax depreciation in excess of book depreciation.
• B) Revenue collected in advance.
• C) The installment sales method for tax purposes.
• D) None of these answer choices are correct.

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Definitions:

Fiduciary Capacity

Refers to a situation where one party, known as a fiduciary, holds a legal or ethical relationship of trust with another party, typically managing assets for them.

Misappropriation

The unauthorized use of another's name, likeness, or other personal attributes for personal or commercial gain.

Defalcation

Refers to the misappropriation of funds or embezzlement by a person entrusted with their care but not necessarily fraud.

False Entries

The intentional act of entering incorrect or misleading information into records or documents, often for fraudulent purposes.