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:

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Timeline

A graphical representation of a chronological sequence of events, typically used to visualize historical events, project milestones, or life events.

Class Inclusion

A cognitive ability, identified in Piaget's theory, to understand that a general category can encompass several subcategories.

Classification Ability

The capacity to organize objects, ideas, or information into categories based on common characteristics or criteria.