The Activity That Causes Changes in the Behavior of Costs

question 186

Multiple Choice

The activity that causes changes in the behavior of costs is referred to as the activity

• A) index.
• B) multiplier.
• C) element.
• D) correlation.

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Definitions:

Passive Activity

Financial activities in which the taxpayer does not materially participate, often generating passive income or losses for tax purposes.

Rental Losses

Financial losses incurred from renting out property, often deductible under specific conditions on a taxpayer's return.

Active Income

Earnings received from direct labor or active business activities, as opposed to passive income from investments.

Portfolio Income

Income from investments, including dividends, interest, and capital gains, excluding active business income.