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Why do you think there are differences between tax and financial accounting rules when computing taxable...

Why do you think there are differences between tax and financial accounting rules when computing taxable income? Do you think any differences could/should be eliminated and why? Include examples in your discussion along with the appropriate IRS code sections if applicable.

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A permanent difference is a difference between the tax expense and taxpayable caused by an item that does not reverse over time. In other words, it is a difference between financial accounting and tax accounting that is never eliminated.The financialstatement begins with revenues and in book accounting.

The difference between the two accounting methods is in the timing of when sales and purchases are recorded based on either accrual or cash.Tax accounting: Spotlight on taxes rather than appearance of public financial statements. Governed by internal revenue code that defines specific rules.

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