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

question 42

Multiple Choice

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

• A) Certain corporations are required to disclose book-tax differences as permanent or temporary on their tax returns.
• B) Temporary book-tax differences will reverse in future years whereas permanent differences will not.
• 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 reasons for why a corporation might distinguish between temporary and permanent differences.
• D) Neither temporary nor permanent book-tax differences will reverse in future years nor are certain corporations required to disclose book-tax differences as permanent or temporary on their tax returns.

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Definitions:

Indentured Servitude

A labor system where people paid for their passage to the New World by working for an employer for a certain number of years.

Manumission

The formal act of freeing a slave by their owner.

Sierra Leone

A country on the southwest coast of West Africa, known for its history of the transatlantic slave trade and rich cultural heritage.

Former Slaves

Individuals who were once enslaved but gained freedom, often through emancipation or escaping bondage.