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What distinguish between temporary and permanent differences?

April 26, 2017differences distinguish PERMANENT Temporary

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What distinguish between temporary and permanent differences?

1 Answer

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10 Posted

A temporary difference is one that will reverse at some point in the future (i.e., depreciation when accelerated depr. is used for tax and straight line for books; most reserve items). A permanent difference will never turn around (i.e., meals and entertainment is an expense for books but can only be deducted up to 50% for tax).