Does cost of goods sold create a temporary tax difference?
No. Cost of goods sold for tax purposes and for book purposes should be exactly the same. Therefore, there should not be a temporary tax difference created.
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What is a temporary difference in tax accounting?
Temporary differences are differences that will be recognized for book in one period and tax in another period. Eventually these differences will balance out and there will not be a difference in the future. Examples will include: A) Expenses or losses deducted either before or after they have been deducted from book income. B) Revenues […]