Which of the following is a permanent difference that is recognized for tax purposes but not for financial reporting purposes?

Which of the following is a permanent difference that is recognized for tax purposes but not for financial reporting purposes?



A. The deduction for dividends received from U.S. corporations.
B. Interest received on state and municipal bonds.
C. Compensation expense associated with certain employee stock options.
D. A litigation accrual.


Answer: The deduction for dividends received from U.S. corporations


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