1) Under ASC 842, fewer leases will be capitalized than before.

True

False

2) When taxable income and book income are different because of differences in depreciation expense, the difference in income is temporary and will eventually reverse.

True

False

3) When taxable income and book income are different because of differences in warranty expense, the difference in income is temporary and will eventually reverse.

True

False

4) When taxable income and book income are different because of differences in interest income from municipal bonds, the difference in income is temporary and will eventually reverse.

True

False

5) In its first year, a company uses accelerated depreciation for tax purposes but not financial reporting purposes. This generates a deferred tax liability.

True

False

6) Assume that a company that receives rental income early is taxed on that income but recognizes the income next year for financial reporting purposes. This company would report a deferred tax asset.

True

False

7) A tax loss carryforward usually generates a deferred tax liability.

True

False

8) A deferred tax asset valuation allowance needs to be used if a company expects unusually high profits in the future.

True

False