Which of the Following Statements Is Incorrect with Respect to Determining

question 130

Multiple Choice

Which of the following statements is incorrect with respect to determining current E & P?

• A)All tax-exempt income should be added back to taxable income.
• B)Dividends received deductions should be added back to taxable income.
• C)Charitable contributions in excess of the 10% of taxable income limit should be subtracted from taxable income.
• D)Federal income tax refunds should be added back to taxable income.
• E)None of the above statements are incorrect.

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Definitions:

Factor Payment

Financial compensation given to the factors of production—namely labor, capital, and resources.

Rent

A payment made by a tenant to a landlord for the use of a property or space.

Capitalism

Capitalism is an economic system characterized by private ownership of the means of production, market-based allocation of resources, and the creation of goods and services for profit.

Private Enterprise System

An economic system where private individuals or businesses own capital goods and the production of goods and services is based on supply and demand in the general market.