2. For each of the differences listed explain the difference in plain English by making up an example. Also explain why it is temporary. See example below

	Plain English description	Why is this temporary	Is this difference currently favorable to the taxpayer?
Depreciation	The equipment is depreciated straight-line for book purposes, but under accelerated depreciation (MACRS) for tax purposes	Although tax depreciation is higher this year, in future years book depreciation will be higher. By its nature, accelerated depreciation means that depreciation deductions go down each year	Yes. The annual depreciation deduction is higher than depreciation expense. This results in lower taxable income and lower taxes actually paid this year.
Gain
Bad debt expense
Warranty expense
Deferred compensation