Final answer:
The use of straight-line depreciation for financial reporting and MACRS for tax purposes results in a deferred tax liability due to the temporary difference created by the accelerated depreciation methods allowed in tax accounting. Therefore correct option is D
Step-by-step explanation:
Using straight-line depreciation for financial reporting purposes and MACRS (Modified Accelerated Cost Recovery System) for tax purposes creates a deferred tax liability. This happens because MACRS allows for faster depreciation in the early years of an asset's life, resulting in lower taxable income compared to financial income reported under the straight-line method. Over time, this leads to a temporary difference between the tax basis of the asset and its reported amount in the financial statements.
The correct answer is therefore (d) a deferred tax liability. A deferred tax liability represents a future tax payment due to current differences between financial accounting and tax accounting. This is distinct from a deferred tax asset, which represents future tax savings. The temporary difference requiring interperiod tax allocation refers to the need to account for the differences between tax reporting and financial reporting over different periods of time.