Permanent differences include items that appear in the Federal income tax return as income or deduction and in the
GAAP financial statements as revenue or expense but in different reporting periods.

Question

Quizplus · Accepted Answer

Permanent differences are items that are included in the calculation of taxable income or financial income but never both. They do not reverse over time, unlike temporary differences which may appear in different periods for tax and financial reporting.

Permanent Differences Include Items That Appear in the Federal Income