Some items are treated as a deduction for tax purposes when they are paid but are recognised as expenses when they are accrued for accounting purposes.Which of the following items are of that type?

Question

Quizplus · Accepted Answer

Long-service leave is typically accrued over time but can be claimed as a tax deduction when it is paid out to the employee. This creates a timing difference between tax and accounting recognition.

Answer: D
 Entertainment expenses are often deductible for tax purposes when they are incurred, but may only be recognised as an expense when they are paid. This creates a timing difference between tax and accounting recognition.

B and C are not examples of items that are treated as deductions for tax purposes when paid but recognised as expenses when accrued. Goodwill amortisation and depreciation are treated as expenses for both tax and accounting purposes when they are incurred.

Some Items Are Treated as a Deduction for Tax Purposes