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

---

Definitions:

Slope

The measure of the steepness or incline of a line on a graph, representing the rate of change.

Vertical Axis

The y-axis on a graph that is typically used to display the variable being measured or manipulated.

Horizontal Axis

In a graph or chart, the x-axis, which typically represents the independent variable or the base measure for comparison.

Pie Chart

A pie chart is a circular statistical graphic divided into slices to illustrate numerical proportion. Each slice represents a category's contribution to the whole.