This Year,Garfield Inc

question 3

Multiple Choice

This year,Garfield Inc.generated a $25,000 net operating loss.Which of the following statements is false?

• A)If Garfield can carry the entire NOL back to deduct against prior year taxable income,the NOL will have no deferred tax consequences.
• B)If Garfield can't use any of the NOL as a carryback deduction,the NOL will result in a deferred tax liability.
• C)Garfield can elect to give up the carryback of the NOL.
• D)If Garfield can't use any of the NOL as a carryback deduction,it can carry the NOL forward for 20 years.

---

Definitions:

Flexible Budget

A report showing estimates of what revenues and costs should have been, given the actual level of activity for the period.

Revenue Variance

The difference between the actual revenue earned by a business and its expected (or budgeted) revenue, which can be favorable or unfavorable.

Sales Revenue

The income received by a company from its sales of goods or the provision of services before any expenses are deducted.

Actual Level

The real, observed state or value of a variable or metric at a given point in time, opposed to theoretical or planned levels.