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

question 134

Multiple Choice

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

• A) Temporary book-tax differences will reverse in future years whereas permanent differences will not.
• B) Certain corporations are required to disclose book-tax differences as permanent or temporary on their tax returns.
• 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.