Mention the underlying balance sheet account where the Book Value is different f

Question

Mention the underlying balance sheet account where the Book Value is different from the tax basis and so causes the temporary difference,in the following scenarions:

1.Compensation, where compensation is based on performance one fiscal period but paid in others (compensation expense is recognized on financial in the period we benefitted – the period where the worker worked for us; on tax we deduct in the period(s) paid).

2.Estimated Expenses, matching principle determines expense recognition on financial; cash basis determines tax deductibility on tax).

3.Bad Debts, Allowance Method used on financial; direct write-off method used on tax.

Explanation / Answer

Question 1). Answer :- Employee Compensation Expense Account.

Question 2). Answer :- Estimated Expense Liability Account.

Question 3). Answer :- Allowance for doubtful debts Account / Provision for doubtful debts Account.

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