Porter Inc. reported a $20,000 expense on its current year financial statements. Only $13,400 of this amount was deductible on Porter's current year tax return. Which of the following is true?
A) This transaction resulted in a $6,600 unfavorable difference between book income and taxable income.
B) This transaction resulted in a $6,600 favorable difference between book income and taxable income.
C) If this transaction resulted in a temporary book/tax difference, it had no effect on Porter's deferred tax accounts.
D) If this transaction resulted in a permanent book/tax difference, it had no effect on the computation of Porter's tax expense per books.
Correct Answer:
Verified
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