When a Person's Net Cash Flow Exceeds His or Her

question 17

Multiple Choice

When a person's net cash flow exceeds his or her reported taxable income,the IRS:

• A) Has an automated system that identifies a taxpayer as a possible tax cheater
• B) Presumes, upon examination, that the taxpayer is underreporting his or her income
• C) Conclusively recognizes that the taxpayer is underreporting his or her income
• D) Conclusively recognizes that the taxpayer has underreported both income and tax payments

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Definitions:

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio to minimize the impact of any single asset's performance.

Product Development

The process of bringing a new product to market, involving idea generation, concept testing, design, manufacturing, and marketing.

Market Development

A growth strategy in which a company seeks to expand its existing product into new markets or geographic areas to increase its customer base.

Market Penetration

A gauge of the level of sales or acceptance of a product or service in relation to the complete potential marketplace for it.