Which of the Following Causes a Permanent Difference Between Taxable

question 6

Multiple Choice

Which of the following causes a permanent difference between taxable income and financial accounting income?

• A) The useful life of an asset is 10 years. The asset is depreciated over 7 years for tax purposes.
• B) Rent received in advance is taxable upon receipt.
• C) A life insurance premium paid by the corporation on a policy that names the corporation as the beneficiary.
• D) A penalty paid to a bank when a CD is cashed before its maturity date.

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Definitions:

Population Mean

The average value of all the elements in a population.

Interval Estimators

Statistic-based range estimates used to infer the value of a population parameter, providing an interval believed to contain the parameter.

Point Estimators

Statistical values calculated from sample data that are used to estimate the true value of a population parameter.

Confidence Interval

A group of values derived from statistical samples that is likely to hold the value of a population parameter that is unknown.