Question # 1

Financial Accounting-2 (chapter: corporate income tax)

Match the following terms with their definitions.

Term	#	Definition
1.Permanent Difference		Arises from a transaction or event that affects both accounting income and taxable income but in different reporting periods.
2. Taxable Temporary Difference		A temporary difference that results in future taxable income being less than accounting income.
3. Deferred Tax Liability		A temporary difference that results in future taxable income being higher than accounting income.
4. Deductible Temporary Difference		The amount of income tax recoverable in future periods as a result of deductible temporary differences, losses carried forward, or tax credits carried forward.
5. Deferred Tax Asset		The amount of income tax payable in future deferred tax liability periods as a result of taxable temporary differences.
6. Temporary Difference		Arises from a transaction or event that affects accounting income but never taxable income, or vice versa.