Final answer:
The correct example of a permanent difference is 'a. fines resulting from a violation of law' because they represent non-deductible expenses that never reverse.
Step-by-step explanation:
An example of a permanent difference occurs when there is a discrepancy between the book income reported on financial statements and the taxable income reported to the Internal Revenue Service that will not reverse over time.
The correct answer to the question is a. fines resulting from a violation of law. Fines and penalties paid to the government because of violations of laws do not become tax-deductible expenses and thus represent a permanent difference.
Options b and c may result in temporary differences that can reverse over time as the related income or expense is recognized for tax purposes. Option d is incorrect because not all the answers listed are examples of permanent differences.
correct option a. fines resulting from a violation of law'