Which One of the Following Statements Is Correct for a Corporation

question 35

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:

Condition Precedent

A condition that must be satisfied before a contract may come into effect.

Purchase Agreement

A legal document outlining the terms and conditions of a sale of property, including price and terms of payment.

Necessary Funds

are the essential monetary resources required to achieve a specific objective or to meet obligations.

Specific Performance

A legal remedy in which a court orders a party to perform a specific act, usually in accordance with a contract.