A deferred tax asset would result if

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A deferred tax asset occurs when a company pays more in taxes according to its financial statements than it owes according to its tax return. This can happen due to timing differences in recognizing revenues and expenses. In choice C, recording more warranty expense than cash paid for warranty repairs in 2016 would lead to a higher expense on the financial statements than on the tax return (since tax deductions are often based on actual cash outflows), creating a deferred tax asset.

A Deferred Tax Asset Would Result If