While it is legitimate for a firm to follow different accounting practices for financial reporting and tax purposes, the relationship between book and tax accounting is likely to remain constant over time, unless there are changes in tax rules or accounting standards.

Question

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While there may be small changes in the relationship between book and tax accounting due to changes in tax rules or accounting standards, overall the relationship between the two tends to remain relatively consistent over time.

While It Is Legitimate for a Firm to Follow Different