1. Which of the following is a temporary difference that normally is recognized for accounting purposes before being reported as an expense for tax purposes?

1. Unearned revenue
2. Product warranty costs
3. Depreciation
4. Fines resulting from violations of the law.

1. Which of the following is true?

1. Deposits received in advance to manufacture inventory items give rise to deferred tax assets.
2. Investments in stocks of other companies accounted for using the equity method give rise to temporary differences but not permanent ones.
3. Deferred taxes applying to unrealized gains and losses for trading securities are included in AOCI.
4. A valuation allowance may be subtracted from deferred tax liabilities.