Question 14

Porter Inc. has a $20,000 book expense but only $13,400 of it is deductible for tax this year. Which of the following is true?

Group of answer choices

This transaction results in a $6,600 unfavorable difference between book income and taxable income in the current year.

This transaction results in a $6,600 favorable difference between book income and taxable income in the current year.

If this transaction results in a temporary book/tax difference, it has no effect on Porter's deferred tax assets or liabilities.

If this transaction results in a permanent book/tax difference, it has no effect on the computation of Porter's tax expense per books.