If a Corporation's Charitable Contributions Exceed the Deduction Limitation in a Particular

question 243

Multiple Choice

If a corporation's charitable contributions exceed the deduction limitation in a particular year, the excess

• A) is carried over indefinitely.
• B) is not deductible in any future year.
• C) may be carried back to the third preceding year.
• D) becomes a carryforward to a maximum of five succeeding years.

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Definitions:

Net Operating Income

The company's profit remaining after operating costs are removed, but prior to the deduction of taxes and interest.

Fixed Manufacturing Overhead

Fixed manufacturing overhead includes the costs associated with manufacturing that do not vary with the level of production, such as rent, salaries, and utility costs.

Ending Inventory

The total value of all the merchandise, raw materials, work in process, and finished goods that a company has at the end of its fiscal period.

Segmented Income Statement

An income statement that breaks down revenues, expenses, and profits by individual segments, departments, or product lines of a business.