Which of the Following Items Is Not a Temporary Difference

question 84

Multiple Choice

Which of the following items is not a temporary difference?

• A)Vacation pay accrued for tax purposes in a prior period is deducted in the current period.
• B)Tax depreciation for the period exceeds book depreciation.
• C)A goodwill impairment expense is recorded on the income statement; the goodwill did not have a tax basis when it was created.
• D)Bad debts charged off in the current period exceed the bad debts accrued in the current period.

---

Definitions:

Periodic Inventory System

A method of inventory valuation wherein updates and cost of goods sold calculations are made at set intervals, not continuously.

Accounting Features

Characteristics or functionalities of accounting systems or software that help in recording, tracking, and analyzing financial transactions.

Weighted Average

involves calculating the average of various values where each value has a different level of importance or weight, commonly used in inventory valuation.

Ending Inventory

is the total value of all inventory a company has in stock at the end of its financial period, important for determining cost of goods sold and net income.