Which of the Following Statements Regarding Book/tax Differences Is False

question 96

Multiple Choice

Which of the following statements regarding book/tax differences is false?

• A)A permanent book/tax difference affects only the year in which it occurs.
• B)A temporary book/tax difference affects two or more tax years.
• C)Temporary book/tax differences arising in the current tax year will reverse in the future in one or more tax years.
• D)The tax cost or benefit of a permanent book/tax difference is recouped over time.

---

Definitions:

Car Buyer

An individual or entity that purchases a vehicle.

Total Amount of Interest

The cumulative sum of interest payments over the life of a loan or financial product.

Compounded Semi-Annually

A method of calculating interest where the interest is added to the principal amount twice a year.

Outstanding Balance

The amount of money owed on a loan or credit account that has not yet been paid.