which of the following does not result in a permanent book/tax difference course hero

Which expense results in a permanent book/tax difference?

The accrued rent expense results in a permanent book/tax difference. d. The accrued rent expense results in a temporary book/tax difference. trademark violation. At the end of the year, RRK's accountant recorded a $750,000 accrued

Is Huml’s book/tax difference permanent?

Huml Inc. could not deduct an accrued expense because of the all-events test. As a result, Huml has a permanent unfavorable book/tax difference.

Are book/tax differences included in taxable income?

income reflected on the books is never included in taxable income. differences. permanent book/tax differences.) An unfavorable temporary book/tax difference generates a deferred tax asset. liabilities in the same year. transaction-by- transaction basis. Consequently, a corporation could engage in transactions same year.)

How does the $19000 excess of book income affect Deferred tax accounts?

If the $19,000 excess of book income over taxable income is permanent, the transaction has no effect on Eddy's deferred tax accounts. d. None of the above is true.

What is taxable income?

Taxable income is defined as gross income minus allowable deductions and credits. False. A taxpayer that wants to change its taxable year from a fiscal year to a calendar year is not required to receive permission from the IRS to make the change. False.

How much was Keagan Company incurred in 2011?

Keagan Company, a calendar year taxpayer, incurred $1,490 of long-distance telephone. charges in December 2010 and mailed a check to the telephone company on January 4, 2011. If Poole is an accrual basis taxpayer, it reports a $1,490 tax deduction in 2011.

How much does Elcox pay for insurance?

Elcox Company, a calendar year, cash basis taxpayer, paid a $6,340 premium to purchase a casualty insurance policy with a 36-month term. Elcox can deduct $6,340 in the year of payment. False (Under the 12-month rule, Elcox must deduct the $6,340 expense over the 36-. month term of the payment.)

Can accrual basis be deducted?

An accrual basis taxpayer that accrues a liability at year-end for unpaid state income tax can deduct the accrued tax expense in the computation of federal taxable income. False (Under the general rule, accrued state income taxes are a payment liability. deductible in the year in which payment is made.)

Is Pim a taxable year?

Pim can adopt a calendar year or any fiscal year as its taxable year. d (A corporate taxpayer can adopt a calendar year or any fiscal year.) Tonto Inc. has used a calendar year as its taxable year since its incorporation in 1990. Tonto has an excellent business reason for changing to a fiscal year ending May 31.

When is Rydel Inc. incorporated?

Rydel Inc. was incorporated on August 9 and elected to use a calendar year for tax purposes. Rydel must annualize the income reported on its first tax return for the short period from August 9 to December 31. False. A taxpayer that operates more than one business may use a different method of accounting.

Can a taxpayer use the cash receipts and disbursements method?

Every taxpayer may adopt either the cash receipts and disbursements method, the accrual method, or a hybrid method of accounting for tax purposes. False (Many large corporations are prohibited from using the cash method for tax. purposes.)