Which of the Following Items Does Not Result in a Permanent

question 107

Multiple Choice

Which of the following items does not result in a permanent difference?

• A)Accelerated tax depreciation in excess of straight-line book depreciation.
• B)Interest income from a tax-exempt municipal bond.
• C)Dividends received deduction on the income tax return.
• D)Excess tax benefits from the exercise of an NQO.

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold in a public marketplace.

Realized Gains

Profit from the sale or exchange of an asset that exceeds its purchase price.

Investments

Assets purchased with the expectation that they will generate income or will appreciate in value in the future.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, typically represented by common stock, preferred stock, and retained earnings.