D'Silva Limited Has a Product Warranty Liability Amounting to $10

question 15

Multiple Choice

D'Silva Limited has a product warranty liability amounting to $10 000.The product warranty costs are not tax deductible until paid out to customers.The company tax rate is 30%.The company has:

• A)a deductible temporary difference of $10 000
• B)an taxable temporary difference of $10 000
• C)a tax base of $10 000
• D)a future deductible amount of $0.

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Definitions:

Nonspendable

Refers to a fund balance category in governmental accounting, indicating funds that cannot be spent because they are not in spendable form or are legally or contractually required to be maintained intact.

Restricted

Pertains to assets or securities that are not fully transferable until certain conditions, often regulatory, are met.

Assigned

The allocation or designation of resources, responsibilities, or tasks to a specific account, project, or individual.

Unassigned

Refers to resources or tasks that have not been allocated or designated to a specific category, department, or individual.