Which of the Following Statements Regarding UNICAP Is Incorrect

question 117

Multiple Choice

Which of the following statements regarding UNICAP is incorrect?

• A)The UNICAP rules result in more costs being included in inventory for tax purposes than for financial accounting.
• B)Taxpayers with gross receipts averaging more than $10,000,000 or more for the prior three years must apply the UNICAP provisions.
• C)Interest must be included in inventory if the property produced is real property or long-lived property.
• D)UNICAP requires that advertising and selling costs be allocated between inventory and cost of sales.

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Definitions:

Cost-benefit Analysis

A methodical strategy for evaluating the advantages and disadvantages of different options to identify the most effective method to realize benefits while ensuring cost savings.

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Economic Grounds

The basis or rationale for decisions and actions based on economic factors, such as cost, benefits, and economic efficiency.