Temporary differences are a result of recording revenues or expenses on financial statements in an accounting period different from when these items are recorded on the firm's tax return.

Question

Quizplus · Accepted Answer

This statement is true. Temporary differences arise when there is a difference in timing between when an item is recognized for financial reporting purposes and when it is recognized for tax purposes. This can result in deferred tax liabilities or assets on the balance sheet.

Temporary Differences Are a Result of Recording Revenues or Expenses