O'Hara Company uses straight-line depreciation for financial reporting purposes and an accelerated depreciation method for tax purposes.As a result,O'Hara will record

Question

Quizplus · Accepted Answer

The difference between the straight-line depreciation used for financial reporting purposes and the accelerated depreciation used for tax purposes creates a timing difference that results in a deferred tax liability. This is because the company will pay less taxes in the earlier years of an asset's useful life due to the accelerated depreciation, but will pay more taxes in the later years when the straight-line method results in higher depreciation expenses. Therefore, the company will owe more taxes in the future, resulting in a deferred tax liability.

O'Hara Company Uses Straight-Line Depreciation for Financial Reporting Purposes and an Accelerated