medium · Financial Accounting accounting-cycle-financial-statements

Pinnacle Corp. collects $10,000 in advance for services to be performed next year. For book purposes, this is unearned revenue (a liability). For tax purposes, the full $10,000 is taxable in the current year. This creates:

1. A deferred tax liability
2. A net operating loss
3. A permanent difference
4. A deferred tax asset

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