Identify Which of the Following Statements Is False

question 20

Multiple Choice

Identify which of the following statements is false.

• A)A corporation with annual gross receipts of $5,000,000 or less can use the accrual method to account for sales,cost of goods sold,inventories,accounts receivable and payable,and the cash method for other income and expenses.
• B)Casualty losses incurred by a corporation are deductible subject to a nondeductible floor similar to those applicable to individuals.
• C)The passive loss rules do not apply to widely held C corporations.
• D)Corporations may receive a deduction for dividends received from other corporations.

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Definitions:

Put Option

This is a financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Strike Price

The set price at which an option contract can be bought (call option) or sold (put option) when it is exercised.

Total Profit

The total income a business generates after all expenses and costs have been subtracted from total revenue.

Convertible Bond

A type of bond that can be converted into a predetermined number of the issuer's equity shares at certain times during the bond's life, usually at the discretion of the bondholder.