1.Accounting for income taxes can result in the reporting of deferred taxes as any of the following except

a current or long-term asset.

a current or long-term liability.

a contra-asset account.

All of these are acceptable methods of reporting deferred taxes.

2.Which of the following is a temporary difference classified as a revenue or gain that is taxable after it is recognized in financial income?

Subscriptions received in advance.

Prepaid royalty received in advance.

An installment sale accounted for on the accrual basis for financial reporting purposes and on the installment (cash) basis for tax purposes.

Interest received on a municipal obligation.