1 Which of the following differences between financial accounting and tax accounting ordinarily creates a deferred tax liability?

A_ Depreciation early in the life of an asset.

B_ Rent collected in advance.

C_ Unrealized losses from recording investments at fair value.

D_ None of these answer choices are correct.

2. Which of the following differences between financial accounting and tax accounting ordinarily creates a deferred tax liability?

A_ None of these answer choices are correct.

B_ Proceeds from life insurance received due to death of an executive.

C_ Interest income on municipal bonds.

D_ Prepaid utilities.

3. Which of the following differences between financial accounting and tax accounting ordinarily creates a deferred tax asset?

A_ Prepaid expenses.

B_ Installment sales for which taxable income recognized when cash is collected.

C_ Unrealized loss from recording inventory impairments.

D_ None of these answer choices are correct.

4. Which of the following differences between financial accounting and tax accounting ordinarily creates a deferred tax asset?

A_ Unrealized gain from recording investments at fair value.

B_ Subscriptions collected in advance.

C_ None of these answer choices are correct.

D_ Depreciation early in the life of an asset.