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.

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Definitions:

Elastic

Describes a situation in which the quantity demanded or supplied changes significantly in response to a change in price.

Demand

The desire of consumers, backed by the ability and readiness to purchase, for specific goods or services at a given time.

Downward-Sloping

A graphical representation indicating a decrease or decline in value or quantity when plotted against another variable, often used in economics to describe demand curves.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at each price.