Which of the Following Statements About the Time Period Variable

question 46

Multiple Choice

Which of the following statements about the time period variable is false?

• A) If Congress replaced the current progressive income tax rates with a proportionate rate applying to all taxpayers, the time period variable would no longer be a factor in tax planning.
• B) The time period variable becomes more important as the taxpayer's discount rate for computing NPV increases.
• C) Tax planning strategies based on the time period variable must involve at least two different taxable years.
• D) Tax planning strategies based on the time period variable reflect the time value of money.

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Definitions:

Income Statement

A financial statement that shows a company’s revenues and expenses over a specific period, leading to the net income or loss for the period.

Treasury Stock

An alternative term for treasury shares, referring to stocks that a company has repurchased and holds, reducing the amount of outstanding stock on the market.

Closing Entries

Made at the end of the accounting period to transfer balances in temporary (income statement) accounts to Retained Earnings and to establish a zero balance in each of the temporary accounts for beginning the next accounting period.

Account Balances

The total amount of money in an account at a certain point in time, which can represent assets or liabilities depending on the account type.