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:

Inventory Costing Methods

Techniques used to determine the cost of inventory sold and remaining in stock, including FIFO, LIFO, and average cost methods.

Periodic Inventory System

An inventory accounting system where updates to the inventory accounts are made periodically, typically at the end of an accounting period, rather than continuously.

Physical Inventory

A detailed listing of merchandise on hand.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.