Which of the Following Statements Regarding Book-Tax Differences Associated with Purchased

question 134

Multiple Choice

Which of the following statements regarding book-tax differences associated with purchased goodwill is false?

• A) In a year when goodwill is impaired and yet fully amortized for tax purposes (so no tax amortization of the goodwill for that year), the book-tax difference will be unfavorable.
• B) Temporary book-tax differences associated with goodwill are always favorable.
• C) If goodwill has been fully amortized for tax purposes in a previous year, the book-tax difference is equal to the amount of impairment recognized.
• D) It is possible to have no book-tax difference in a year when there is no goodwill amortization for tax purposes.

---

Definitions:

Variability

The extent to which data points in a statistical distribution or data set diverge from the average or mean value.

Range

The difference between the highest and lowest scores in a set of data.

Standard Deviation

A measure of the amount of variability or dispersion of a set of data values, indicating how much variation there is from the average (mean).

Range

The difference between the highest and lowest values in a data set.