Which of the Following Statements Is Correct Regarding the Taxation

question 58

Multiple Choice

Which of the following statements is correct regarding the taxation of C corporations?

• A)Schedule M-2 is used to reconcile net income as computed for financial accounting purposes with taxable income reported on the corporation's tax return.
• B)The corporate return is filed on Form 1120S.
• C)Corporations can receive an automatic extension of nine months for filing the corporate return by filing Form 7004 by the due date for the return.
• D)A corporation with total assets of $7.5 million or more is required to file Schedule M-3.
• E)None of the above.

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Definitions:

Scrap Value

The anticipated market value of an asset at the end of its operational lifetime.

Sum-Of-The-Years-Digits

A depreciation method that results in a more accelerated write-off of the asset, calculated by adding together the digits of the asset's useful life years.

MACRS Tables

The Modified Accelerated Cost Recovery System tables used in the United States for tax purposes to determine the depreciation of assets over time.

Allowable Depreciation

The allowable tax deduction for the reduction in value of a tangible asset over its useful life, as determined by tax regulations.