Question

When taxable income and book income are different because of differences in warranty expense, the difference...

When taxable income and book income are different because of differences in warranty expense, the difference in income is permanent and will not reverse.
Group of answer choicesTrue
False
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Answer #1

False

Reason:-

In future differences in income will be reversed because it is a timing difference. Income tax does not allows until we pay actually but accounting books recognized on an expected basis. Therefore, when actual warrant expenses occur, then the timing difference will be reversed.

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