Davison Company determined that the book basis of its net accounts receivable was less than the tax basis of its net accounts receivable by $800,000 due to a difference in the allowance for bad debts account. This basis difference is characterized as:

A. Favorable permanent difference.
B. Unfavorable permanent difference.
C. Deductible temporary difference.
D. Taxable temporary difference.


Answer: C

Business

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