Differences in Taxable Income and Pretax Accounting Income That Will

question 60

Multiple Choice

Differences in taxable income and pretax accounting income that will not be offset by corresponding differences or "turn around" in future periods are called:

• A)timing differences.
• B)circular differences.
• C)permanent differences.
• D)reverse differences.

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Definitions:

Economic Costs

The total cost of choosing one action over another, including both explicit costs (direct payments) and implicit costs (opportunity costs).

Accounting Costs

Explicit costs involving monetary payment or outlay by an organization or individual for goods or services.

Economic Profit

The difference between the total revenue generated by a business and the total costs, including both explicit and implicit costs.

Accounting Profit

The total revenue of a firm minus the explicit costs directly associated with its operation, such as materials and labor, calculated according to standard accounting practices.