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:

The Prospector

A type of strategic business model focused on innovation, exploring new markets, and seeking out new opportunities, often characterized by flexibility and a willingness to take risks.

Defender Strategy

a business strategy focused on maintaining current markets and customers, often by focusing on product improvement and maintaining a stable growth rate.

Entrepreneurial Employees

Refers to employees within an organization who possess an entrepreneurial mindset, often driving innovation, taking initiative, and contributing to the company's growth like internal entrepreneurs.

HR Managers

Professionals responsible for overseeing human resource functions within an organization, including recruitment, training, compensation, and compliance with employment laws.