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 these is true.

Question

Quizplus · Accepted Answer

Temporary book-tax differences arise because of timing differences in recognizing income or expenses for book and tax purposes, but eventually, the total amount recognized will be the same for both.

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