Listed below are 10 causes of temporary differences. For each temporary difference, indicate (by letter) whether it

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Listed below are 10 causes of temporary differences. For each temporary difference, indicate (by letter) whether it will create future deductible amounts (D) or future taxable amounts (T).

Temporary Difference
_____ 1. Accrual of 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 available for sale at fair value (tax-deductible when investments are sold).
_____ 7. Bad debt expense; allowance method for financial reporting; direct write-off for tax purposes.
_____ 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 postretirement benefits, tax-deductible when subsequent payments are made.

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Intermediate Accounting

ISBN: 9781259722660

9th Edition

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

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