C is corrent because a temporary difference results from a transaction which affects taxable income in a different time period than it affects pretax accounting income for financial reporting purposes. Deferred taxes must be recognized for such temporary differences. A permanent difference results from a transaction which affects only book income or only taxable income, but not both. Deferred tax recognition is not appropriate to account for such differences since they do not affect other periods.
A is incorrect. Temporary difference results from a transaction which affects taxable income in a different time period than it affects pretax accounting income for financial reporting purposes. Deferred taxes must be recognized for such temporary differences. A permanent difference results from a transaction which affects only book income or only taxable income, but not both. Deferred tax recognition is not appropriate to account for such differences since they do not affect other periods.
B is incorrect. Temporary difference results from a transaction which affects taxable income in a different time period than it affects pretax accounting income for financial reporting purposes. Deferred taxes must be recognized for such temporary differences. A permanent difference results from a transaction which affects only book income or only taxable income, but not both. Deferred tax recognition is not appropriate to account for such differences since they do not affect other periods.
D is incorrect. Temporary difference results from a transaction which affects taxable income in a different time period than it affects pretax accounting income for financial reporting purposes. Deferred taxes must be recognized for such temporary differences. A permanent difference results from a transaction which affects only book income or only taxable income, but not both. Deferred tax recognition is not appropriate to account for such differences since they do not affect other periods.
|
