Which of the Following Is an Example of a Temporary

question 34

Multiple Choice

Which of the following is an example of a temporary difference that could result in a deferred tax asset?

• A) Gain on disposal of an asset when included in taxable income before it is included in pretax accounting income
• B) Use of straight-line depreciation for accounting purposes and an accelerated rate for income tax purposes
• C) Gross margin on installment sales is recognized for accounting purposes before it is included in taxable income in the income tax return
• D) Prepayments of expenses in year of payment;recognition of expense for accounting purposes occurs in a later year

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Definitions:

Ethical Decisions

Choices made based on moral principles and values, considering what is right and wrong.

Conflicting Duties

Situations where an individual or organization faces two or more obligations that are difficult to fulfill simultaneously due to their opposing natures.

Ethical Dilemma

A situation where a person must choose between two morally correct actions that conflict.

Principle of Universality

A moral or ethical principle stating that rules or standards apply equally to everyone, regardless of circumstances or status.