Of the Following Temporary Differences, Which One Ordinarily Creates a Deferred

question 41

Multiple Choice

Of the following temporary differences, which one ordinarily creates a deferred tax asset?

• A) Completed-contract method for long-term construction contracts for tax reporting.
• B) Installment sales for tax reporting.
• C) Accrued warranty expense.
• D) Accelerated depreciation for tax reporting.

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Definitions:

Total Liabilities

The cumulative amount of all debts and financial obligations a company owes to outside parties.

Owner's Equity

The residual interest in the assets of a company after deducting liabilities, representing the owner's stake.

Total Assets

Represents the sum of all resources owned by a company, including cash, inventory, property, and equipment, that are expected to provide future economic benefits.

Period Of Time

A specific duration or length of time during which an event occurs or conditions exist.