8. Which is the permanent difference item as per AS 22?
Options
AEmployer PF Contribution exp.
BDonation
CUnamortized preliminary expenses
DDepreciation
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Advanced AccountingMCQQuestion 5274 of 305
All Questions Correct Answer
✅ Option B — Donation
All Options:
- AEmployer PF Contribution exp.
- BDonation ✓
- CUnamortized preliminary expenses
- DDepreciation
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Detailed Solution & Explanation
Under AS 22 (Accounting for Taxes on Income):
1. Permanent differences are those differences between taxable income and accounting income which originate in one period and do not reverse subsequently.
2. Donations are typically disallowed permanently under the Income Tax Act, and thus constitute a permanent difference.
3. Other items like depreciation, preliminary expenses, and PF contributions are temporary differences because they reverse in subsequent years.
Hence, **Option B** is the correct answer.
1. Permanent differences are those differences between taxable income and accounting income which originate in one period and do not reverse subsequently.
2. Donations are typically disallowed permanently under the Income Tax Act, and thus constitute a permanent difference.
3. Other items like depreciation, preliminary expenses, and PF contributions are temporary differences because they reverse in subsequent years.
Hence, **Option B** is the correct answer.
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