An example of an inflexible expense is entertainment

All of the following are examples of temporary differences that result in taxable amounts in future years except

a. subscriptions received in advance b. installment sales c. investments accounted for under the equity method d. long-term construction contracts

Mega Corp is being sued for violating U.S. clean air laws. If Mega Corp’s CEO directs its employees to destroy all environmental reports that will be damaging to Mega Corp so that the plaintiffs don’t get them, may the employees destroy the environmental reports?

A. Yes, because they have not been asked for yet B. Yes, because they are confidential business documents C. No, this is spoliation of evidence D. No, a court would have to permit destruction