The Physical Presence Test Method of Qualifying for the Foreign-Earned

question 18

Multiple Choice

The physical presence test method of qualifying for the foreign-earned income exclusion requires the

• A)presence in one foreign country for at least 330 full days during a 12-month period.
• B)presence in one or more foreign countries for at least 330 full days during a single tax year.
• C)presence in one or more foreign countries for at least 330 full days during a 12-month period.
• D)presence in one or more foreign countries for at least 330 consecutive full days during a 12-month period.

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Definitions:

Net Operating Income

A measure of a company's profitability from its core business operations, excluding non-operating income and expenses.

Variable Expense Ratio

A measurement that indicates the proportion of variable expenses to sales, showing how costs change with sales volume.

Break-even Point

The sales amount where the total income matches the total expenses, leading to neither profit nor loss for the company.

High-low Method

An analytical technique used in accounting and finance to estimate fixed and variable costs associated with business operations based on the highest and lowest levels of activity.