Which of the Following Statements Regarding Exclusions And/or Deferrals Is

question 84

Multiple Choice

Which of the following statements regarding exclusions and/or deferrals is false?

• A) Deferrals are income items taxpayers realize in one year but include in gross income in a subsequent year.
• B) Exclusions are favorable because taxpayers never pay tax on income that is excluded.
• C) Interest income from municipal bonds is excluded from gross income.
• D) An income item need not be realized in order to qualify as an exclusion item.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, often referred to as shareholder's equity or owners' equity.

Gross Margin Percentage

A financial metric that measures the proportion of money left over from revenues after accounting for the cost of goods sold, expressed as a percentage.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period.

Provided Data

Information or statistics made available or given to support analysis, decision-making, or reporting.