Permanent tax differences are revenues and expenses:
A) that firms include in income tax returns, but do not appear in the income statement.
B) that are included in both the tax return and income statement, but in different accounting periods.
C) that firms include in the income statement, but do not appear in income tax returns.
D) that are not included in either the tax return or the income statement.

Question

Quizplus · Accepted Answer

Permanent tax differences arise when certain revenues or expenses are recognized in the income statement but are never recognized for tax purposes, meaning they do not appear in the income tax returns.

Permanent Tax Differences Are Revenues and Expenses