The Use of Estimates on a Tax Return Generally Is

question 35

Multiple Choice

The use of estimates on a tax return generally is:

• A) Prohibited
• B) Allowed, but must be disclosed if the amounts involved are material
• C) Allowed, but must be disclosed if most, or all, of the line items on the tax return were estimated
• D) Allowed only if documents were destroyed by a natural disaster or computer failure

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Definitions:

Strategy

A plan of action designed to achieve a long-term or overall aim.

Total Cost Concept

An accounting approach that includes all costs - direct and indirect - associated with producing a good or service.

Government Agencies

Official organizations at the federal, state, or local level that administer and oversee specific functions or areas of public interest.

Product Pricing

The process of determining the financial value at which a product will be sold to consumers, balancing cost, demand, and profit objectives.