Discussion Question 17-17 (LO. 6) Complete the paragraph below to answer the following: What is the difference between the terms "temporary difference" and "permanent difference" as they pertain to the financial reporting of income tax expenses? How do these two book-tax differences affect the gap between book and taxable income? How are permanent and temporary differences alike? How are they different? Permanent differences are caused by items appearing in the financial statements or the tax return, but not both. Temporary differences are caused by income and expenses appearing in both the financial statements and tax return but in different periods. Only temporary differences result in a gap between book and taxable income. Permanent differences reverse over time, but permanent differences do not