Identify Which of the Following Statements Is True

question 46

Multiple Choice

Identify which of the following statements is true.

• A)Any amount of net business interest disallowed due to limitation may be carried over indefinitely.
• B)If a corporation accrues an obligation to pay compensation, the corporation must make the payment by year-end to be able to deduct during the current year.
• C)Corporations can deduct up to $10,000 in capital losses per year.
• D)Net business interest is limited to 50% of adjusted taxable income.

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Definitions:

Operating Budget

A detailed projection of all expected income and expenses based on forecasted sales revenue during a given period, typically a fiscal year.

Accounts Receivable

Amounts owed by customers on account.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, often used to assess liquidity and cash requirements.

Financing Section

A part of the cash flow statement that shows the net flows of cash used to fund the company’s capital expenditures and financial investments.