Final answer:
The statement regarding permanent differences leading to deferred tax consequences is false, as permanent differences do not reverse over time and hence do not create deferred tax assets or liabilities, unlike temporary differences.
Step-by-step explanation:
The statement 'Permanent differences result in deferred tax consequences' is false. Permanent differences are differences between taxable income and accounting income that will not reverse in the future. These can arise from items that are recognized for accounting purposes but are never taxable or deductible for tax purposes. As such, they do not give rise to deferred tax assets or liabilities. Conversely, temporary differences between taxable income and accounting income are what lead to deferred tax consequences because they are expected to reverse in the future, aligning the tax and accounting treatments over time.
To further clarify, imagine a permanent tax cut announced by the government. It is expected to remain in place indefinitely, thus affecting the behavior of individuals and firms more significantly than a temporary tax cut, which might only last a year or two before reverting back to its original level. This is because the permanent tax cut would change long-term fiscal expectations, while the temporary cut might be viewed as a short-term incentive with limited impact on long-term financial decisions.