Identify Which of the Following Statements Is True

question 26

Multiple Choice

Identify which of the following statements is true.

• A) An affiliated group electing to file a consolidated return may be composed of as few as two corporations.
• B) To be part of an affiliated group, a corporation must be at least 80% directly owned by another group member.
• C) Only common stock is considered when determining if the 80% ownership test is met for affiliated group eligibility.
• D) All of the above are false.

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Definitions:

Accumulated Depreciation

Accumulated depreciation represents the total amount of depreciation expense that has been recorded against a fixed asset since it was acquired, reducing its book value on the balance sheet.

Operating Activities

Business activities that relate directly to the production, sale, and delivery of a company's products and services.

Depreciation

The process of allocating the cost of buildings and equipment (but not land) over their productive lives using a systematic and rational method

Accounts Receivable

Represents money owed to a company by its customers for goods or services that have been delivered but not yet paid for.