Stuart Corporation's taxable income differed from its accounting income computed for this past year.An item that would create a permanent difference in accounting and taxable incomes for Stuart would be

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Permanent differences arise from items that are included in either accounting income or taxable income, but not both. Fines resulting from violations of environmental regulations are not deductible for tax purposes, creating a permanent difference.

Stuart Corporation's Taxable Income Differed from Its Accounting Income Computed