Identify Which of the Following Statements Is True

question 61

Multiple Choice

Identify which of the following statements is true.

• A)A corporate capital loss can be carried back three years,and then can be carried forward five years.
• B)Corporate capital loss carrybacks can offset corporate ordinary income earned in previous years.
• C)At the election of a corporation,a net capital loss carryback can be forgone and carried forward only.
• D)All are false.

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Definitions:

Differential Analysis

A financial technique used to compare the costs and benefits of alternative business decisions.

Fixed Factory Overhead

Refers to the consistent costs associated with operating a production facility, which do not vary with the level of output, such as rent, salaries of managers, and depreciation of factory equipment.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding costs directly related to production.

Differential Income

The difference in income between two alternative business decisions, used in assessing the financial viability of each option.