Which of These Items Is Not an Adjustment to Taxable

question 27

Multiple Choice

Which of these items is not an adjustment to taxable income or net loss to compute current E&P?

• A) Dividends received deduction
• B) Tax-exempt income
• C) Net capital loss carryforward from the prior year tax return
• D)Refund of prior year taxes for an accrual method taxpayer

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Definitions:

Total Cost

The sum of fixed and variable costs incurred by a business in the production of goods or services.

Profit

The financial gain achieved when the revenue gained from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Economic Profit

The disparity between total income and total outlays, considering both manifest and concealed costs.

(P - ATC)q

The formula representing profit in economic terms, where P stands for price, ATC for average total cost, and q for quantity produced or sold.