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:

Analytic Rationale

The logical reasoning or analysis used to understand or justify decisions, policies, or strategies, often involving systematic examination of data or facts.

Liberal Rationale

Reasoning based on principles emphasizing freedom, democracy, and the importance of individual rights.

Eclectic Approach

A method that draws from multiple theories, styles, or ideas to create a comprehensive solution or understanding.

Ethical Reasoning

The process of evaluating and deciding the best course of action in situations that involve moral principles or values.