The two broad categories of differences that result from determining financial income and taxable income are

A) temporary differences and originating differences.
B) temporary differences and reversing differences.
C) temporary differences and permanent differences.
D) permanent differences and deferred differences.

The two broad categories of differences that result from determining financial income and taxable income are temporary differences and permanent differences. Temporary differences arise because certain transactions are recognized for financial reporting purposes in one period but are recognized for tax purposes in a different period. Permanent differences arise because certain items are included in financial income but are not allowed as deductions in calculating taxable income, or vice versa.