Asked by Tristan Angelo Villa on May 04, 2024
Verified
Which one of the following is a permanent difference between book and taxable income?
A) Interest received on municipal bonds
B) Installment sales
C) Bad debts expense
D) Warranty expense
Municipal Bonds
Debt securities issued by municipalities or local governments to finance public projects, typically offering tax-exempt interest payments to investors.
Permanent Difference
Refers to the discrepancy between book income and tax income that arises from certain items being recognized in either financial accounting or tax accounting, but not in both, leading to a difference that does not reverse over time.
- Separate temporary from permanent differences and understand their effects on taxable income.
Verified Answer
Learning Objectives
- Separate temporary from permanent differences and understand their effects on taxable income.
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