Question: Indicate whether each situation below results in a temporary or permanent difference for the purpose of accounting for income taxes by selecting the appropriate circle.
Indicate whether each situation below results in a temporary or permanent difference for the purpose of accounting for income taxes by selecting the appropriate circle.
| Situation | Temporary difference | Permanent difference |
|---|---|---|
| 1. An assurance-type warranty liability is recognized as an expense in financial income when a product is sold and recognized in taxable income when the expenditures are made in a future period. | ||
| 2. A receivable from a nondealer installment sale recognized at the time of sale in financial income and at the time of collection in taxable income. | ||
| 3. An asset depreciates more quickly for tax purposes than for financial reporting purposes. | ||
| 4. Percentagedepletionofcertainnaturalresources. | ||
| 5. The insurance premiums paid by a beneficiary entity on policies covering its corporate officers. | ||
| 6. Subscriptions revenue received in advance that is recognized in taxable income when received and in financial income when earned in a later period. |
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