Which of the Following Temporary Differences Creates a Deferred Tax

question 20

Multiple Choice

Which of the following temporary differences creates a deferred tax liability?

• A) Accumulated tax depreciation in excess of book depreciation on a building.
• B) Accumulated tax amortization in excess of book amortization on a customer list.
• C) Compensation expensed for book purposes but deferred for tax purposes.
• D) Both "Accumulated tax depreciation in excess of book depreciation on a building" and "Accumulated tax amortization in excess of book amortization on a customer list" create a deferred tax liability."

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Definitions:

Electrical Current

The flow of electric charge through a conductor, enabling the functioning of electrical systems and devices.

Ohm's Law

A fundamental principle of electrical engineering stating that the current through a conductor between two points is directly proportional to the voltage across the two points.

E = I x R

Ohm's law, stating that the electric current (I) through a conductor between two points is directly proportional to the potential difference (V) across the two points.

Series Circuit

An electrical circuit in which all of the parts of the circuit occur in a single path.