Which of the Following Statements Appears Correct for a Corporation

question 120

Multiple Choice

Which of the following statements appears 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:

Investment

The allocation of resources, such as capital, time, or assets, into a project or asset, with the expectation of generating an income or profit.

Spending Multiplier

The spending multiplier is an economic concept that measures the effect of a change in autonomous spending (such as government expenditure or investment) on the total economic output.

Potential Output

Potential Output refers to the highest level of goods and services an economy can produce sustainably, without triggering inflation.

Government Securities

Government-issued securities designed to fund government spending while providing investors with a profit.