Which of the Tax Concept(s) Allow for the Deferral of Gains

question 97

Multiple Choice

Which of the tax concept(s) allow for the deferral of gains on nonrecognition transactions?
I.Capital Recovery Concept.
II.Ability to Pay Concept.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, directly affecting the production of goods.

Direct Materials Cost

The cost of raw materials that can be directly traced to the production of a specific product.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities related to production, providing more accurate product costing.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, serving as a basis for assigning labor costs to products.