Which of the Following Statements Is FALSE

question 21

Multiple Choice

Which of the following statements is FALSE?

• A)Under Australian tax law, multinational corporations may use any excess tax credits generated in high-tax foreign countries to offset their net Australian tax liabilities on earnings in low-tax foreign countries.
• B)Firms can lower their taxes by pooling multiple foreign projects and accelerating the repatriation of earnings.
• C)If the Australian tax rate exceeds the combined tax rate on all foreign income, it is valid to assume that the firm pays the same tax rate on all income no matter where it is earned.
• D)If the foreign tax rate exceeds the Australian tax rate, because the Australian tax credit exceeds the amount of Australian taxes owed, no tax is owed in Australia.

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Definitions:

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest in the company.

Owner's Drawings

The funds taken from the business by the owner for personal use, not considered as salary or wages.

Owner Drawings

Refers to the money or assets taken out of a business by the owner(s) for personal use.

Net Income

The profit or loss of a business after all expenses, taxes, and costs have been subtracted from total revenue.