Which of the Following Statements Regarding Book-Tax Differences Associated with Purchased

question 111

Multiple Choice

Which of the following statements regarding book-tax differences associated with purchased goodwill is false?

• A) It is possible to have no book-tax difference in a year when there is no goodwill amortization for tax purposes.
• B) In a year when goodwill is impaired and yet fully amortized for tax purposes (so no tax amortization of the goodwill for that year), the book-tax difference will be unfavorable.
• C) Temporary book-tax differences associated with goodwill are always favorable.
• D)If goodwill has been fully amortized for tax purposes in a previous year, the book-tax difference is equal to the amount of impairment recognizeD.It is possible to have an unfavorable difference in a year when goodwill impairment exceeds the allowable amortization deduction.