An Operating Loss Carryforward Occurs When

question 5

Multiple Choice

An operating loss carryforward occurs when

• A)prior pretax financial income is insufficient to offset the current period operating loss
• B)prior taxable income is insufficient to offset the current period operating loss
• C)future pretax financial income is insufficient to offset a current period operating loss
• D)future taxable income is insufficient to offset a current period operating loss

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Definitions:

Equity Method

An accounting technique used by firms to assess the profits earned by their investments in other companies and to reflect this in the profit and loss statement proportionally to their ownership level.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but does not fully control the company, typically 20%-50% ownership.

Proportionate Share

An individual's or entity's part or share of something in relation to the whole, usually expressed as a percentage.