Permanent Differences

question 15

Multiple Choice

Permanent differences:

• A) arise due to differences between income tax legislation and accounting rules, in a particular period, and are reversed in subsequent periods.
• B) are accounted for by creating and/or passing entries through to "Deferred Tax Assets" and "Deferred Tax Liabilities" accounts.
• C) must be considered, and accounted for, by the creation of deferred tax asset and liabilities for all balance sheet items (e.g., including asset revaluations), rather than just income statement items, which is a major change created by the new standard.
• D) arise due to differences between income tax legislation and accounting rules, in a particular period, and are reversed in subsequent periods; are accounted for by creating and/or passing entries through to "Deferred Tax Assets" and "Deferred Tax Liabilities" accounts; must be considered, and accounted for, by the creation of deferred tax asset and liabilities for all balance sheet items (e.g., including asset revaluations), rather than just income statement items, which is a major change created by the new standard
• E) None of the given answers.

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Definitions:

Cognitive Approach

A psychological viewpoint that focuses on understanding how people process, store, and retrieve information and how this affects behavior.

Teaching Tool

Any item, strategy, or method used to convey knowledge or facilitate learning.

Appropriateness

The quality of being suitable or fitting for a specific context, circumstance, or purpose.

Multicultural

Relating to or containing several cultural or ethnic groups within a society.