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Which of the following items is not a permanent book/taxdifference?A) Tax-exempt life insurance proceeds...

Which of the following items is not a permanent book/tax difference?

A) Tax-exempt life insurance proceeds

B) Non-deductible meal expense

C) Accrued vacation pay liability not paid within the first 2 1/2 months of the next tax year

D) Excess tax benefits from the exercise of NQOs

Please explain

Solutions

Expert Solution

The correct option is (c).

Reason: In the given case, accrued vacation pay liability which has not been paid within the first 2.5 months of next tax year then such expense will not be allowed in the current year, however it could be allowed whenever it shall be paid.

Hence that is case of non-permanent book difference.

jeff jeffy answered 2 years ago
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