Which of the Following Temporary Differences Creates a Deferred Tax

question 67

Multiple Choice

Which of the following temporary differences creates a deferred tax asset in the year in which it originates?

• A)Accelerated tax depreciation in excess of straight-line book depreciation.
• B)Prepayment income reported as income on the tax return prior to being reported as income on the financial income statement.
• C)Gain reported on the income statement prior to being reported on the tax return.
• D)Prepayment deduction reported on the tax return prior to being reported on the income statement.

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Definitions:

Tethered

To be tied or anchored to a particular point or place, restricting freedom of movement.

Learned Association

A psychological principle where an individual connects two stimuli or a stimulus and a behavior through repeated exposure.

Sensorimotor Stage

The first stage in Piaget's theory of cognitive development, from birth to about 2 years of age, where infants learn about the world through their sensory impressions and motor activities.

Concrete Operational

A stage in Jean Piaget's theory of cognitive development during which children (ages 7-12 approximately) gain a better understanding of mental operations, leading to more logical thoughts about concrete events.