When accounting for income taxes Fox Co had a single booktax

When accounting for income taxes, Fox Co. had a single book-tax difference. Which of the following scenarios would indicate that Fox had a permanent difference?

Solution

When Income tax expense is equal to income tax payable - it indicates the permanent difference.

If Income tax expense is less than income tax payable - there exist a temparary difference on account of which deffered tax assets will be recognised. Vicerversa if Income tax expense is more than Income tax payable, there exist a deffered tax liability

So Answer is Income tax expense is equal to Income tax payable.