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

question 53

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 that is never deductible
• 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:

Excise Tax

A tax on the production, sale, or consumption of a commodity in a country.

Demand Curves

A graphical representation showing the quantity of a good that consumers are willing and able to purchase at various price levels, holding other factors constant.