Which of the Following Can Be Used to Offset a Passive

question 65

Multiple Choice

Which of the following can be used to offset a passive loss?

• A)Active income such as wages
• B)Passive income such as income from a limited partnership
• C)Dividend income from stock held as an investment
• D)Pension income

---

Definitions:

Fixed Cost

An expense that remains constant regardless of the volume of products or services manufactured or distributed.

Relevant Range

The range of activity within which assumptions about variable and fixed cost behavior are valid.

Volume of Activity

Refers to the level of operations or the amount of output produced or services rendered in a certain period.

Fixed Cost

Costs that remain constant in total regardless of changes in the level of activity or volume of production.