Identify Which of the Following Statements Is False

question 28

Multiple Choice

Identify which of the following statements is false.

• A)The personal exemption for a trust provides a tax savings when some income is allocated to principal.
• B)Distributable net income (DNI)sets the ceiling on the amount of distributions taxed to the beneficiaries.
• C)A complex trust must distribute all its income annually.
• D)The beneficiaries of a simple trust are taxed on their share of DNI irrespective of the amount they receive.

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Definitions:

Expenditures

The financial outflows or payments made by an individual, organization, or government unit, usually for goods or services.

Average Product

The output per unit of input, calculated by dividing total output by the quantity of inputs used.

Production Possibilities

Different combinations of goods and services that an economy can produce efficiently with its available resources and technology.

Diminishing Returns

The principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.