Which of the following creates a temporary difference between income for financial reporting purposes and income for tax purposes?
A)Meals and entertainment expenses
B)Warranty costs
C)Penalties on the late payment of sales taxes
D)Capital gains

Question

Quizplus · Accepted Answer

Warranty costs create a temporary difference between income for financial reporting purposes and income for tax purposes because they are deductible for tax purposes when paid, but are generally expensed for financial reporting purposes when the warranty is honored.

Which of the Following Creates a Temporary Difference Between Income