Which of the Following Statements Regarding Exclusions And/or Deferrals Is

question 30

Multiple Choice

Which of the following statements regarding exclusions and/or deferrals is false?

• A)Exclusions are favorable because taxpayers never pay tax on income that is excluded.
• B)Interest income from municipal bonds is excluded from gross income.
• C)Deferrals are income items taxpayers realize in one year but include in gross income in a subsequent year.
• D)An income item need not be realized in order to qualify as an exclusion item.

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Definitions:

Support Departments

Units within an organization that provide essential services to other departments or divisions but do not directly produce revenue.

Profit Center

A decentralized unit in which the manager has the responsibility and the authority to make decisions that affect both costs and revenues (and thus profits).

Budget Performance Report

A report comparing the actual financial performance with the planned or budgeted amounts, often highlighting variances for analysis.

Cost Center

A business division that incurs costs but directly does not generate revenues, its performance being measured through cost control.