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An Item That Would Create a Permanent Difference in Pretax

Question 10

Multiple Choice

An item that would create a permanent difference in pretax financial and taxable incomes would be


A) using accelerated depreciation for tax purposes and straight-line depreciation for book purposes.
B) purchasing equipment previously leased with an operating lease in prior years.
C) using the percentage-of-completion method on long-term construction contracts.
D) paying fines for violation of laws.

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