Final answer:
Temporary differences include timing differences between accounting and taxable income that will reverse in future periods. Option (c) which states that these represent all differences that will result in taxable or deductible amounts in future periods is the correct answer.
Step-by-step explanation:
Temporary differences represent the kinds of timing differences between accounting income and taxable income that are expected to reverse or 'turn around' in future periods. These differences arise because certain items of income and expense are recognized in different periods for financial reporting purposes compared to when they are recognized for tax purposes. If we analyze the options given:
- (a) represents one half of temporary differences, those that will become deductible in future periods but aren't deductible currently.
- (b) likewise represents the other half, differences that will be taxable in the future but aren't taxable in the current period.
- (c) is the correct answer as it encompasses both (a) and (b), representing all differences that will reverse in future periods and become either taxable or deductible amounts.
- (d) does not accurately describe temporary differences at all.
Thus, temporary differences include both types of temporary timing differences, and the correct option is (c) All differences that will result in taxable or deductible amounts in future periods.