Which of the following statements regarding book-tax differences is true?
A)Corporations are not required to report book-tax differences on their income tax returns.
B)Corporations will eventually recognize the same amount of income for book and tax purposes for income-related temporary book-tax differences.
C)Income excludable for tax purposes usually creates a temporary book-tax difference.
D)None of the choices are correct.

Question

Quizplus · Accepted Answer

Temporary book-tax differences arise when a revenue or expense item is recognized in different periods for financial accounting purposes than for tax purposes. Over time, the total amount of income recognized will be the same for both book and tax purposes, but the timing of when that income is recognized may differ.

Which of the Following Statements Regarding Book-Tax Differences Is True