The Claim-Of-Right Doctrine I.explains Why Carla Does Not Report $10,000 of Income on of Income

question 28

Multiple Choice

The Claim-of-Right Doctrine
I.explains why Carla does not report $10,000 of income on her tax return when she borrows $10,000 from the First Savings Bank.
II.differs from the constructive receipt doctrine in that constructive receipt applies where an amount has been received,and the tax question is whether the amount is taxable in the current year.
III.explains why Samuel reports $45 of interest credited to his savings account on December 31,2013,on his 2013 tax return,even though he does not actually receive the cash in 2013.
IV.applies when a taxpayer has no definitive obligation to repay the amount received.

• A)Statements I and IV are correct.
• B)Statements II and III are correct.
• C)Statements II and IV are correct.
• D)Statements I and III are correct.
• E)Statements II, III, and IV are correct.

Identify conditions under which a firm should continue, reduce, or cease production in the short run.

Apply the principle of marginal revenue and marginal cost to decision-making in price-taker markets.

Interpret economic models and data tables to calculate profit, loss, and optimal production levels.

Distinguish between short-run and long-run decision-making for firms in competitive markets.

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