Of the following temporary differences, which one ordinarily creates a deferred tax asset?

Question

Quizplus · Accepted Answer

Accrued warranty expense creates a temporary difference because it is deductible for tax purposes when the expense is paid or settled, but is recognized as an expense for financial reporting purposes when the product is sold. This creates a deferred tax asset because the deductible amount will reduce future taxable income. The other options do not create a deferred tax asset.

Of the Following Temporary Differences, Which One Ordinarily Creates a Deferred