Which of the Following Statements Describes a Permanent Book/tax Difference

question 52

Multiple Choice

Which of the following statements describes a permanent book/tax difference?

• A) An expense reported on the current income statement but deducted on next year's tax return
• B) A revenue item included in current taxable income but not reported on the income statement until next year
• C) An expense (or loss) is realized for book purposes but never recognized for tax purposes
• D) A revenue item reported on the current income statement but not included in taxable income until an indefinite future year

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Definitions:

Production

The process of combining various material inputs and immaterial inputs (plans, know-how) to make something for consumption (the output).

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or taking an action.

Autarky

A national economic policy aimed at self-sufficiency, avoiding the import of foreign goods.

Netherlands

A country located in Northwestern Europe known for its flat landscape, extensive canal systems, tulip fields, windmills, and cycling routes.