Generally, Which of the Following Does Not Correctly Categorize the Type

question 33

Multiple Choice

Generally, which of the following does not correctly categorize the type of income?

• A) salary − active income/loss
• B) rental real estate − passive income/loss
• C) capital losses − passive income/loss
• D) dividends − portfolio income/loss
• E) All of the choices are correct.

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Definitions:

Direct Materials Cost

The cost of raw materials and components that are directly traceable to the finished product.

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities they require and the resources consumed by these activities.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, directly affecting the production of goods.

Direct Materials Cost

The cost of raw materials that can be directly traced to the production of a specific product.