A corporation's taxable income almost never is the same as its GAAP financial accounting income. Explain why this occurs. Use the terms permanent and temporary book-tax differences in your answer. Give examples of each.
Temporary differences are caused by income and expenses appearing in both the financial statement and tax return, but in different periods (i.e., a timing difference). Permanent differences are caused by items appearing in the financial statement or the tax return, but not both. Temporary differences do not affect the book total tax expense. Temporary differences merely shift tax expense (benefit) between the current and deferred accounts. Permanent differences do affect the total book tax expense and are identified in the tax footnote rate reconciliation.

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The Answer of A corporation's taxable income almost never is the same as its GAAP financial accounting income. Explain why this occurs. Use the terms permanent and temporary book-tax differences in your answer. Give examples of each.
Temporary differences are caused by income and expenses appearing in both the financial statement and tax return, but in different periods (i.e., a timing difference). Permanent differences are caused by items appearing in the financial statement or the tax return, but not both. Temporary differences do not affect the book total tax expense. Temporary differences merely shift tax expense (benefit) between the current and deferred accounts. Permanent differences do affect the total book tax expense and are identified in the tax footnote rate reconciliation.

A Corporation's Taxable Income Almost Never Is the Same as Its