CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

Which of the following causes a permanent difference between taxable income and accounting profit?

A. Advance collection of revenues
B. MACRS depreciation used for plant assets
C. Interest income on municipal securities
Correct Answer: C

This is an example of a permanent difference since interest on municipal securities is exempt from income (thus, the difference will not reverse in the future).

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