Identify Which of the Following Statements Is True

question 76

Multiple Choice

Identify which of the following statements is true.

• A) Section 382 adopts a single- entity approach in determining ownership changes.
• B) The 50- percentage- point minimum stock ownership change that triggers the Sec. 382 loss limitation rules will not occur in acquisitive transactions involving a group of corporations filing consolidated returns.
• C) A built- in deduction accrues in a separate return year, but is not recognized in a consolidated return year.
• D) All of the above are false.

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Definitions:

Indirect Method

A way of calculating cash flows in the cash flow statement, where net income is adjusted for changes in non-cash items and working capital.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.

Sale Of Equipment

The process of disposing of fixed assets, such as machinery, for cash or other compensation.

Operating Activities

These are the core activities that generate revenue and involve expenses for a company, including sales and service provision.