Identify Which of the Following Statements Is False

question 56

Multiple Choice

Identify which of the following statements is false.

• A) A controlled group must apportion certain tax benefits among its members.
• B) There are three categories of control groups: parent- subsidiary, brother- sister, and combined.
• C) The controlled group test is applied on December 31.
• D) Brown Corporation owns 60% of Clark Corporation and 65% of Davis Corporation. Davis Corporation owns 10% of Clark Corporation, and Clark Corporation owns 10% of Davis Corporation. The remaining stock is owned by an individual shareholder. Brown, Davis, and Clark Corporations are a parent- subsidiary controlled group.

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Definitions:

Bank Statement

A summary of all transactions mailed to the depositor or made available online by the bank each month.

Petty Cash System

A method used by businesses to manage small, daily expenses, involving a small store of cash on hand.

Cash Payments

Financial activities that result in the spending of cash to fulfill debts or acquire products and services.

Bank Reconciliation

The process of matching and comparing figures from accounting records against those shown on a bank statement to ensure they are in agreement.