This Year, Nilo Inc

question 101

Multiple Choice

This year, Nilo Inc. granted nonqualified stock options to 230 employees. For financial statement purposes, Nike recorded a $179,200 expense for the estimated value of the options. As a result of this transaction, Nike has a:

• A)Temporary favorable book/tax difference
• B)Temporary unfavorable book/tax difference
• C)Permanent favorable book/tax difference
• D)Permanent unfavorable book/tax difference

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Definitions:

U.S. Labor Force

The total number of individuals in the United States who are actively employed or seeking employment.

Federal

Pertaining to the central government of a country, as opposed to local or state governance.

State

A politically organized territory with a permanent population, defined territory, government, and the ability to enter into relations with other states.

Regressive Tax

A tax system where the tax rate decreases as the taxable amount increases, leading to a higher tax burden on lower-income earners.