Identify Which of the Following Statements Is False

question 37

Multiple Choice

Identify which of the following statements is false.

• A)Adjusted current earnings (ACE)is the same as E&P.
• B)A corporation's positive adjusted current earnings (ACE)adjustment equals 75% of the excess of its ACE over its preadjustment AMTI (AMTI before this adjustment and the alternative tax NOL deduction).
• C)A corporation's negative adjusted current earnings (ACE)adjustment equals 75% of the excess of its preadjustment AMTI (AMTI before this adjustment and the alternative tax NOL deduction)over its ACE,but may not exceed the cumulative "net" ACE adjustment amounts from all post-1989 tax years.
• D)The ACE adjustment is not required of S corporations.

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Definitions:

Cash

Liquid assets held by a company or individual, used for transactions or as a reserve for future payments.

Consolidation

Consolidation is the process of combining the financial statements of a parent company and its subsidiaries into a single, comprehensive set of statements.

Outstanding Common Stock

Shares of a company's common stock that have been issued and are in the hands of investors, including those held by the public and company insiders but excluding treasury shares.

Annual Amortization

The procedure of methodically deducting the starting cost of an intangible asset throughout its period of utility.