It Is Important to Distinguish Between Temporary and Permanent Book-Tax

question 6

Multiple Choice

It is important to distinguish between temporary and permanent book-tax differences for which of the following reasons?

• A)Temporary book-tax differences will reverse in future years whereas permanent differences will not.
• B)Certain corporations are required to disclose book-tax differences as permanent or temporary on their tax returns.
• C)Both "Temporary book-tax differences will reverse in future years whereas permanent differences will not." and "Certain corporations are required to disclose book-tax differences as permanent or temporary on their tax returns." are the reasons.
• D)Neither "Temporary book-tax differences will reverse in future years whereas permanent differences will not." nor "Certain corporations are required to disclose book-tax differences as permanent or temporary on their tax returns." is the reason.