All of the Following Would Normally Result in Permanent Differences

question 37

Multiple Choice

All of the following would normally result in permanent differences between tax and financial accounting except:

• A)Business meal expenses
• B)Depreciation expense
• C)Interest income on municipal bonds
• D)Government fines

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Definitions:

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated by adjusting the beginning inventory for purchases and sales during the period.

Materials

The raw items or supplies used in the manufacturing of a product or in the operation of a business.

Equivalent Unit

A measure used in process costing that converts partially completed units into a number of fully completed units.

Process Costing System

A method of costing used for homogeneous products that are continuously produced, assigning costs to units of output on the basis of direct materials, labor, and manufacturing overhead.