Which Statement Is Correct

question 53

Multiple Choice

Which statement is correct?

• A)Undepreciated capital cost (UCC)is the net carrying amount of an asset or asset class for tax purposes.
• B)A deductible temporary difference is a temporary difference that results in future taxable income being more than accounting income.
• C)A terminal loss is the tax loss arising from the sale of an asset for proceeds above its undepreciated capital cost.
• D)Recaptured depreciation is the taxable income recorded for the reversal of previous capital cost allowance when the sale proceeds of an asset are less than its undepreciated capital cost.

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Definitions:

Price Leadership

A market situation where one or more dominant firms set the price of goods or services, and other firms in the industry follow suit.

Kinked-Demand Curve Model

An economic theory suggesting that prices become rigid or sticky due to competing firms' responses to price changes.

Collusion

A secret agreement between firms in a market to fix prices, limit production, or divide markets, in order to reduce competition and increase profits.

Marginal Cost

The additional cost incurred for the production of one more unit of a good or service, an essential concept for making efficient production decisions.