Which One of the Following Statements Is Correct for a Corporation

question 21

Multiple Choice

Which one of the following statements is correct for a corporation with a negative net income in both the present and the last fiscal year?

• A)this year's loss can be carried back, but last year's loss cannot be used.
• B)neither of the losses can be used to reduce taxes.
• C)both losses can be carried forward but not backward.
• D)both losses can be carried forward and backward, within certain time limits.

---

Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, showing the profitability of sales before other operating expenses are deducted.

Cost of Goods

The total direct costs attributable to the production of goods sold by a company, including materials and labor.

Cost of Goods Manufactured

The aggregate expense of finished goods within a certain timeframe, encompassing materials, workforce, and indirect costs.

Work in Process Inventory

Inventory at various stages of production, not yet completed but undergoing manufacturing processes.