Reference no: EM132825694

Problem 1: Which of the following will result in a deferred tax asset?

Option 1: Using the installment sales method for tax purposes, while using point of sale for financial reporting.

Option 2: Reporting an unrealized gain for a trading security.

Option 3: Using accelerated depreciation for tax purposes and straight-line depreciation for financial reporting.

Option 4: Reporting an expected loss on from a lawsuit in the income statement, when it cannot be reported on the tax return until it is actually incurred.

Problem 2: Which of the following approaches to interperiod tax allocation best represents an example of the matching principle?

Option 1: The deferred method of interperiod income tax allocation

Option 2: Discounting deferred income taxes

Option 3: Nonallocation of income taxes

Option 4: The asset/liability method of income tax allocation.