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For Each of the Items Below, Determine Whether the Items

Question 78

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For each of the items below, determine whether the items are temporary differences or permanent differences.
For each temporary difference, determine whether a deferred tax asset or deferred tax liability is created by the temporary difference described. Assume that each of the temporary differences described is an originating difference.

Premises:
Accrued bad debt expense
The dividends received deduction
Installment sales revenue
Insurance payments for executives for which the company is the beneficiary
Fines paid for law violations
Municipal bond interest
Accrued warranty expense
Revenues received in advance
Expenses paid for in advance (prepaid insurance)
Tax depreciation expense exceeds GAAP (book) depreciation expense
Responses:
Temporary difference
Permanent difference
deferred tax asset
deferred tax liability

Correct Answer:

Accrued bad debt expense
The dividends received deduction
Installment sales revenue
Insurance payments for executives for which the company is the beneficiary
Fines paid for law violations
Municipal bond interest
Accrued warranty expense
Revenues received in advance
Expenses paid for in advance (prepaid insurance)
Tax depreciation expense exceeds GAAP (book) depreciation expense
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