Question

Which of the following is not an example of a permanent difference between pretax financial income...

Which of the following is not an example of a permanent difference between pretax financial income and taxable income?

Question 1 options:

A)

Interest earned on tax exempt municipal bonds is included in pretax financial income

B)

Straight-line depreciation is expensed for financial accounting purposes but accelerated depreciation is used for income tax purposes

C)

Fines related to the violation of law

D)

All of these are permanent differences between pretax financial income and taxable income

Homework Answers

Answer #1
Straight-line depreciation is expensed for financial accounting purposes but accelerated depreciation is used for income tax purposes is not an example of a permanent difference between pretax financial income and taxable income
Straight-line depreciation and accelerated depreciation for income tax purposes result in temporary difference in between pretax financial income and taxable income.
Interest earned on tax exempt municipal bonds and Fines related to the violation of law result in permanent difference between pretax financial income and taxable income.
Option B is correct
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