For each item listed below, indicate whether it involves a:
a.permanent difference.b.temporary difference that will result in future deductible amounts (giving rise to deferred tax assets).c.temporary difference that will result in future taxable amounts (giving rise to deferred tax liabilities).?
____1.
Rent is collected in advance from a tenant. Rent is taxable when received. ____2.
Warranty costs are accrued at the time of sale for accounting purposes, but are not deductible until paid for income tax purposes. ____3.
Interest revenue is recorded on municipal bonds. ____4.
Installment sales are recognized at the point of sale for accounting purposes, but when the cash is received for income tax purposes. ____5.
A loss contingency is expensed for accounting purposes. The company expects to pay the amount involved in three years. ____6.
Bad debt expense is estimated for accounting purposes, but is not deducted for income tax purposes until written off. ____7.
The company paid a fine from the EPA for violation of environmental regulations.?
Required:Match each item to its descriptive phrase by placing the appropriate letter in the space provided.
What will be an ideal response?
| 1. | b | 5. | b |
| 2. | b | 6. | b |
| 3. | a | 7. | a |
| 4. | c |
You might also like to view...
______________________is defined as a planned system that uses behavioral science knowledge to increase an organization’s efficiency and effectiveness.
a. Process consultation b. Organizational development c. Organizational intervention d. Intergroup development
The contracts of a person who is adjudicated insane and placed in care of a guardian are void
a. True b. False Indicate whether the statement is true or false
Assume that the risk-free rate, rRF, increases but the market risk premium, (rM - rRF), declines with the net effect being that the overall required return on the market, rM, remains constant. Which of the following statements is CORRECT?
A. The required return of all stocks will increase by the amount of the increase in the risk-free rate. B. The required return will decline for stocks that have a beta less than 1.0 but will increase for stocks that have a beta greater than 1.0. C. Since the overall return on the market stays constant, the required return on each individual stock will also remain constant. D. The required return will increase for stocks that have a beta less than 1.0 but decline for stocks that have a beta greater than 1.0. E. The required return of all stocks will fall by the amount of the decline in the market risk premium.
A company with a low inventory turnover requires a smaller investment in inventory than one producing the same sales with a higher turnover.
Answer the following statement true (T) or false (F)