Final answer:
The option that is not a permanent difference is litigation accruals, as this can reverse in the future, affecting both the financial accounting and tax accounting in different periods.
Step-by-step explanation:
The question is asking which of the given options is not a permanent difference in the context of accounting, specifically tax accounting. Permanent differences are those items of revenue or expense that are treated differently for accounting and tax purposes and will never be reversed. The option presented that is not a permanent difference is litigation accruals (d). Litigation accruals are temporary differences because they can reverse in the future when the actual litigation payment is made, affecting both the financial and the tax accounting in different periods.
- Fines resulting from a violation of law (a) are non-deductible for tax purposes, thereby creating a permanent difference.
- Golf club membership dues (b) are typically not deductible for tax purposes as well, thus also a permanent difference.
- Proceeds from life insurance carried on key officers (c) are not taxable income for the corporation, and this represents a permanent difference.