Identify Which of the Following Statements Is False

question 28

Multiple Choice

Identify which of the following statements is false.

• A)The personal exemption for a trust provides a tax savings when some income is allocated to principal.
• B)Distributable net income (DNI)sets the ceiling on the amount of distributions taxed to the beneficiaries.
• C)A complex trust must distribute all its income annually.
• D)The beneficiaries of a simple trust are taxed on their share of DNI irrespective of the amount they receive.

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Definitions:

Contribution Margin Per Unit

The difference between the selling price per unit and variable cost per unit of a product.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, influenced by the proportion of fixed costs in total costs.

Net Operating Income

Net Operating Income is the total profit of a company after deducting operating expenses but before interest and taxes.

Net Operating Income

A company's profitability from its regular business operations, excluding expenses and incomes from other non-operating activities.