Which of the Following Accounts May Be Thought of as Stored

question 96

Multiple Choice

Which of the following accounts may be thought of as stored costs that are carried forward to future periods rather than immediately recorded as an expense?

• A)Prepaid insurance
• B)Utilities expense
• C)Salaries expense
• D)Depreciation expense
• E)Cost of goods sold

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Definitions:

Deferred Tax Liabilities

Future tax payments due to temporary differences between financial accounting and tax accounting practices.

Deferred Tax Assets

Assets on a company's balance sheet that may be used to reduce future tax liability resulting from temporary timing differences between accounting and tax treatments.

Current Tax Liabilities

Taxes owed to the government within the current fiscal year.

Temporary Difference

Refers to the differences that arise between the tax base of an asset or liability and its carrying amount in the financial statements, which will result in taxable or deductible amounts in future years.