Using Straight-Line Depreciation for Financial Reporting Purposes and MACRS for Tax

question 66

Multiple Choice

Using straight-line depreciation for financial reporting purposes and MACRS for tax purposes in the first year of an asset's life creates a:

• A)Future deductible amount.
• B)Permanent difference not requiring interperiod tax allocation.
• C)Deferred tax asset.
• D)Deferred tax liability.This temporary difference creates a future taxable amount giving rise to a deferred tax liability.

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Definitions:

Ova

The female reproductive cells, or eggs, which are capable of developing into a new organism when fertilized by a sperm cell.

Oocytes

Immature eggs found in the ovaries of females that, upon maturation, can undergo ovulation and potentially fertilization.

Endometrium

The mucous membrane lining the interior of the uterus, which thickens during the menstrual cycle in preparation for possible implantation of an embryo.

Blastocyst

An early stage of embryonic development, a structure formed in the early development of mammals, consisting of a sphere of cells surrounding an inner fluid-filled cavity.