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Listed below are 10 causes of temporary. For each temporary difference, indicate (by letter) whether it will create future deductible amounts (D) or future taxable amounts (T). 1. Accrual of a loss contingency, tax-deductible when paid. 2. Newspaper subscriptions; taxable when received, recognized for financial reporting when earned. 3. Prepaid rent, tax-deductible when paid. 4. Accrued bond interest expense, tax-deductible when paid. 5. Prepaid insurance, tax-deductible when paid. 6. Unrealized loss from recording investments at fair value (tax-deductible when investments are sold). 7. Warranty expense; estimated financial reporting when products are sold; deducted for tax purposes when paid. 8. Advance rent receipts on an operating lease (as the lessor), taxable when received. 9. Straight-line depreciation for financial reporting; accelerated depreciation for tax purposes. 10. Accrued expense for employee post-retirement benefits, tax-deductible when subsequent payments are made.

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M92050349

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