Answer: Temporary difference that gives rise to interperiod tax allocation
Step-by-step explanation:
As a result of the difference in accounting for the business and for tax purposes, the Business could reflect taxes in a given period but only pay in another period due to revenue not having been received yet.
Firms generally account for revenue regardless of if they have been paid or not so.they will include a tax on the total amount including accounts that have not been settled. Tax Authorities however require that only after the accounts have been settled should they pay. This goes vice versa when a company is paid in advance.
The result is that for instance, in the first Scenario described, the company records a tax higher than it will actually pay. This is TEMPORARY because the company will pay the remainder in the period that those accounts are settled. This is called an Interperiod Tax Allocation.