Shank Corporation uses a different depreciation method for its income tax return than it does for its income statement. Consequently, the corporation has a credit balance in its Deferred Income Taxes account. This balance should be classified as a

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The credit balance in Deferred Income Taxes account is a result of the temporary difference in depreciation methods used for tax purposes and financial reporting purposes. As the difference is going to reverse in the long term, the credit balance is classified as a long-term liability on the balance sheet.

Shank Corporation Uses a Different Depreciation Method for Its Income