Identify Which of the Following Statements Is True

question 45

Multiple Choice

Identify which of the following statements is true.

• A)In a complex trust, distributable net income (DNI)does not act as a ceiling on the amount of the distribution deduction.
• B)Distributable net income (DNI)is not reduced by the charitable contribution deduction when calculating the deductible discretionary distributions for a complex trust.
• C)In a complex trust, distributable net income (DNI)is not reduced by the charitable contribution deduction when comparing DNI with the mandatory distributions in order to determine the amount of the distribution deduction.
• D)All of the above are false.

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Definitions:

Schedule Of Cost Of Goods Sold

A schedule that contains three elements of product costs—direct materials, direct labor, and manufacturing overhead—and that summarizes the portions of those costs that remain in ending Finished Goods inventory and that are transferred out of Finished Goods into Cost of Goods Sold.

Work In Process

Inventory items that are in the production process but not yet completed; often abbreviated as WIP.

Manufacturing Overhead Cost

Manufacturing overhead cost includes all indirect factory-related expenses incurred during the production process, such as maintenance, utilities, and quality control.

Cost Of Goods Manufactured

The total cost incurred to manufacture products, including labor, materials, and overhead, that were completed during a specific period.