Which of the Following Temporary Differences Creates a Current Deferred

question 56

Multiple Choice

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

• A) Accumulated depreciation on a building
• B) Accumulated amortization on a customer list (intangible with a five-year life)
• C) Unearned revenue expected to be collected in the next 12 months
• D)Deferred compensation expected to be paid in the next 12 months

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Definitions:

Efficiency

The degree to which resources are used optimally to produce goods and services, minimizing waste and maximizing output.

Market Price

The current price at which an asset or service can be bought or sold in the market.

Value Loss

The decrease in worth or utility of an asset or commodity, often due to changes in market demand, deterioration, or obsolescence.

Gift

An item given to someone without the expectation of payment or anything in return.