Question: 2. When differences between financial and tax reporting do occur, the differences can be classified into two types: permanent and temporary. Which of these is

2. When differences between financial and tax reporting do occur, the differences can be classified into two types: permanent and temporary. Which of these is correct? A permanent difference is a difference that affects the tax records but not the accounting records, or vice versa. A temporary difference is a difference that affects both book and tax records but not in the same time period. Temporary differences are timing differences. All of the above.

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