Identify Which of the Following Statements Is True

question 1

Multiple Choice

Identify which of the following statements is true.

• A) If a corporation becomes a member of an affiliated group within the first thirty days of the corporation's tax year, the corporation can elect not to file a short- period tax return.
• B) When a corporation joins in filing a consolidated return, taxable income of the member is combined with other members' taxable income prior to any adjustments.
• C) A corporation may be required to file a separate return and file with an affiliated group in the same calendar year.
• D) All of the above are false.

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Definitions:

Permanent Accounts

Accounts in the general ledger that are not closed at the end of the accounting year, such as assets, liabilities, and equity accounts.

Temporary Accounts

Accounts used to track transactions within a specific accounting period, closed out at the end of the period, such as revenues, expenses, and dividends.

Income Tax Summary Report

A document that aggregates all relevant income tax information for an individual or business for a fiscal period.

Tax Line

A specific line on a tax form where particular income, deduction, or credit information is entered, affecting tax calculations.