Identify Which of the Following Statements Is True

question 112

Multiple Choice

Identify which of the following statements is true.

• A) In computing an NOL for the current year, a deduction is allowed for NOLs from previous years.
• B) A corporate NOL can be carried back two years and forward 15 years.
• C) An NOL incurred before 2018 carries forward 20 years and is not subject to the 80% of taxable income limitation.
• D) All of the above are false.

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Definitions:

Net Sales

The amount of sales revenue left after deducting sales returns, allowances, and discounts from gross sales.

Gross Profit

The profit from sales revenue remaining after the cost of goods sold is subtracted, but before accounting for overheads, payroll, taxes, and interest expenses.

Sales Returns

Goods returned to the seller by the buyer after the sale, leading to a reduction in sales revenue.

Discount Period

The timeframe within which a buyer can make payment less a discount for early settlement, encouraging quicker payment from customers.