Identify Which of the Following Statements Is True

question 61

Multiple Choice

Identify which of the following statements is true.

• A)When a new corporation joins an affiliated group, all of its income and expense items for the tax year, including the acquisition date, must be allocated between the separate tax return and consolidated tax return that are to be filed based on the number of days included in each of the two tax years.
• B)A consolidated return election may be revoked after 5 years.
• C)All members of a consolidated group must use the same tax year.
• D)All of the above are false.

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Definitions:

Net Working Capital

An evaluation of an entity's liquidity level, which is obtained by the subtraction of current liabilities from current assets.

Earnings Per Share

A company's profit divided by the outstanding shares of its common stock, indicating the company's profitability.

Depreciation Expense

An accounting method that allocates the cost of a tangible asset over its useful life.

Fixed Assets

Long-term tangible assets used in the operations of a business, not expected to be converted to cash within a year.