CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

Assume that Able Corporation has paid and expensed several speeding fines for its salespeople. Fines are never deductible for tax purposes. This will result in which of the following?
A. No temporary difference
B. Taxable temporary difference and future income tax liability
C. Taxable temporary difference and future income tax asset
Explanation: When an expense is not deductible for tax purposes, it is a permanent difference; therefore, there is no temporary difference at all. This amount is eliminated when calculating the accounting income subject to tax.

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