A 'permanent difference' between accounting profit and taxable profit:
AReverses in future periods
BWill never reverse (e.g. entertainment costs disallowed)CORRECT
CCauses deferred tax
DEquals temporary differences
ACCATaxation
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Why the answer is B, and why the others tempt you.
Permanent differences (e.g. fines, entertainment) never reverse and so do not generate deferred tax.
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