Which of the Following Temporary Differences Ordinarily Results in a Deferred

question 29

Multiple Choice

Which of the following temporary differences ordinarily results in a deferred tax liability?

• A) Accrued warranty costs
• B) Unrealized losses on marketable securities
• C) Depreciation
• D) Subscription revenue received in advance

---

Definitions:

Marginal Propensity

The fraction of an additional unit of income that is spent on consumption rather than being saved.

Consumption Function

The relationship in the economy between consumption and income, other things constant.

Saving Function

The relationship between the level of saving and the level of income, typically showing that saving increases as income increases.

Consumption Function

An economic formula that expresses the relationship between total consumption and gross national income, indicating how much households are likely to spend.