All of the following transactions lead to temporary timing differences except:
A)the use of straight-line amortization of accounting purposes.
B)the use of estimated warranty costs for calculating warranty expense.
C)the recognition of dividend income for dividends received from another Canadian company.
D)all of the above lead to temporary timing differences.

Question

Quizplus · Accepted Answer

Option C does not result in temporary timing differences because dividend income recognized in the accounting period is the same as the amount actually received. Options A and B result in temporary timing differences because the accounting entries for these transactions are based on estimates and may not reflect the actual amounts incurred in the future. Therefore, the actual timing of recognition and the tax recognition of these transactions may differ.

All of the Following Transactions Lead to Temporary Timing Differences