Identify Which of the Following Statements Is True

question 6

Multiple Choice

Identify which of the following statements is true.

• A) When a cash- basis taxpayer elects to take a credit for accrued foreign income taxes, certain other income and expense items must likewise be accrued.
• B) A nonresident alien can elect to be considered a resident alien if the nonresident alien is married to a U.S. citizen or a resident alien sometime during the tax year and both spouses consent.
• C) The taxpayer may revoke an election to exclude foreign- source earned income if a loss is incurred from foreign employment.
• D) All of the above are true.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - as part of the cost of a product.

Variable Production Costs

Costs that change in direct proportion to changes in the level of production, such as raw materials and hourly labor.

Fixed Production Costs

Expenses that do not change with the level of production or sales over a short period, such as rent, salaries, and insurance, ensuring stability in production costs despite output variations.

Net Income

The total profit of a company after accounting for all costs and expenses, including taxes, interest, and depreciation.