Assuming Current Earnings and Profits Are Computed by Making Certain

question 7

Multiple Choice

Assuming current earnings and profits are computed by making certain modifications to current taxable income, which of the following is false?

• A)An adjustment is required if the corporation maintains its inventory using the LIFO method.
• B)No adjustment is needed if capital losses exceed capital gains.
• C)An adjustment is required when the installment sales method is elected.
• D)An adjustment is required when the corporation sells property to its sole shareholder at a loss.
• E)An adjustment is necessary if MACRS is used.

---

Definitions:

Expropriation

The act of a government taking privately owned property, either with compensation or without compensation, for public use.

Nonconvertible Currency

A currency that cannot be freely converted into other currencies on the foreign exchange market due to foreign exchange regulations.

Globalization

The process of interaction and integration among people, companies, and governments worldwide, often characterized by global trade and cultural exchange.

Exploitation Of Labor

The unfair treatment of workers, often involving overstretched work hours, underpayment, or poor working conditions, for the benefit of employers.