Which of the following temporary differences results in a deferred tax asset in the year the temporary difference originates?
I.Accrual for product warranty liability.
II.Subscriptions received in advance
III.Prepaid insurance expense.

Question

Quizplus · Accepted Answer

I. Accrual for product warranty liability and II. Subscriptions received in advance both result in deferred tax assets because they create temporary differences where expenses are recognized for tax purposes before they are recognized in financial accounting, leading to a future tax benefit.

Which of the Following Temporary Differences Results in a Deferred