Differences between pretax financial accounting and taxable income that are expected to reverse in one or more future accounting periods are called

A) temporary differences
B) permanent differences
C) material differences
D) quasi differences

Temporary Differences

The differences between the accounting income and taxable income that are not permanent and will reverse in future periods.

Permanent Differences

These are variations between taxable income and accounting income that originate from certain items being recognized in one manner for tax purposes and another for financial reporting purposes and do not reverse over time.

Pretax Financial Accounting

The process of preparing financial statements that calculate revenues, expenses, and earnings before taxes are deducted.