Which of the following transactions would not create a temporary difference?

A) The cash payment to acquire a three-year insurance policy.
B) The accrual of warranty expense.
C) The accrual of bad debts expense.
D) The cash collection of interest earned on a municipal bonD.

Municipal Bond

A debt security issued by municipalities to finance its capital expenditures, often tax-exempt for investors.

Warranty Expense

Costs incurred by a company due to repairing or replacing products under warranty.

Bad Debts Expense

An expense reported on the income statement, representing the money lost by a business from non-recoverable credit sales.