Asked by gloria goodman on Jun 20, 2024
Verified
A revenue item that causes book income to be more (less)than taxable income when it is initially recorded,is called a temporary difference.
Temporary Difference
A difference between the carrying amount of an asset or liability in the balance sheet and its tax base, which will result in taxable or deductible amounts in the future.
Book Income
The income of a business as reported in its financial statements, using the accounting methods and standards specified by the relevant authority.
- Identify the contrast between permanent and temporary distinctions in the realm of tax accounting.
- Appreciate the significance of temporary disparities on deferred tax assets and liabilities.
Verified Answer
RS
Rachel SchechterJun 27, 2024
Final Answer :
True
Explanation :
This statement correctly defines a temporary difference as a revenue item that causes a difference between book income and taxable income when initially recorded.
Learning Objectives
- Identify the contrast between permanent and temporary distinctions in the realm of tax accounting.
- Appreciate the significance of temporary disparities on deferred tax assets and liabilities.
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