Every Year,the IRS Selects a Certain Number of Form 1040s

question 47

Multiple Choice

Every year,the IRS selects a certain number of Form 1040s for audit.What is the approximate average audit coverage rate (percentage of individual returns filed selected for audit) ?

• A)About 1%
• B)About 5%
• C)Between 10% and 12%
• D)None of the above

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Definitions:

Partial Equity Method

An accounting method used for investments, where the investor recognizes part of the investee's income based on the percentage owned.

Unamortized Trademark

The portion of a trademark's cost that has not yet been expensed over its useful life.

Equity Method

An accounting technique used by firms to assess the profits earned through their investment in other companies by reporting these earnings as income.

Amortization

The gradual reduction of a debt over a period of time through regular payments.