Which of the Following Statements Is False

question 32

Multiple Choice

Which of the following statements is false?

• A) A realized gain that is never recognized results in the temporary recovery of more than the taxpayer's cost or other basis for tax purposes.
• B) A realized gain on which recognition is postponed results in the temporary recovery of more than the taxpayer's cost or other basis for tax purposes.
• C) A realized loss that is never recognized results in the permanent recovery of less than the taxpayer's cost or other basis for tax purposes.
• D) A realized loss on which recognition is postponed results in the temporary recovery of less than the taxpayer's cost or other basis for tax purposes.
• E) All of the above.

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Definitions:

Debit Increases

Debit increases refer to the accounting principle where increases in assets, expenses, and losses are recorded on the debit side of a ledger.

Credit Decreases

In accounting, actions that decrease liabilities or increase assets, typically reflected in the credits column of a ledger.

Account

A record that summarizes financial transactions of a specific type, such as revenue, expenses, assets, or liabilities.

Credit

An accounting entry that increases a liability or equity account, or decreases an asset or expense account.