Differences between the carrying amounts of an entity's net assets determined under accounting standards, and the tax bases of those net assets, are described as:
A) temporary differences;
B) permanent differences;
C) tax losses;
D) the current income tax liability.

Question

Quizplus · Accepted Answer

Differences between the carrying amounts of an entity's net assets determined under accounting standards and the tax bases of those net assets are described as temporary differences. This is because these differences are expected to reverse out over time, resulting in a difference between book and tax values that is only temporary.

Differences Between the Carrying Amounts of an Entity's Net Assets