Of the following temporary differences, which one ordinarily creates a deferred tax asset? O Installment sales for tax reporting. O Fines paid for violation of law. O Prepaid expenses. O Estimated warranty expense.

Recognition of tax benefits in the loss year due to a NOL carry back involves: O The establishment of an income tax refund receivable. Only a note to the financial statements. The establishment of a deferred tax liability. O The establishment of a deferred tax asset.

A deferred tax account is classified on the balance sheet as: A net noncurrent amount A net current amount It should never appear on the balance sheet Either a current or a noncurrent liability

Listed below are items that are treated differently for accounting purposes than they are for tax purposes. Indicate whether the items are permanent differences or temporary differences. For temporary differences, indicate whether they will create deferred tax assets or deferred tax liabilities. 1.   Investments accounted for by the equity method (ignore dividends received deduction).                                                                                                                             2.   Advance rental receipts.                                                                                                                             3.   Fine for polluting.                                                                                                                             4.   Estimated future warranty costs.                                                                                                                             5.   Excess…