Legislation Is Often Difficult to Draft Precisely Because

question 48

Multiple Choice

Legislation is often difficult to draft precisely because:

• A)words possess the precision of mathematical symbols.
• B)language is, by its very nature, precise.
• C)there are many ways that words and phrases can be misunderstood.
• D)very few words have more than one meaning.

---

Definitions:

Prepaid Asset

Expenses paid in advance for goods or services to be received in the future, which are recorded as assets until they are used or consumed.

Taxable Income

The amount of income subject to taxes, calculated by adjusting gross income for deductions, exemptions, and allowances, according to tax laws.

Deferred Income Tax Asset

A balance sheet item that represents taxes paid or carried forward but not yet realized on the income statement.

Net Operating Loss

The deficit that occurs when a business's expenses exceed its revenues, excluding taxes and certain other expenses, over a fiscal period.