Allowing a net operating loss NOL) carryforward can be justified:
A) As mitigating the effect of the annual accounting period concept.
B) By economic considerations.
C) As promoting administrative feasibility.
D) Based on the wherewithal to pay concept.
E) By none of these.

Question

Quizplus · Accepted Answer

Allowing a net operating loss (NOL) carryforward can be justified as mitigating the effect of the annual accounting period concept because it allows businesses to smooth out income and losses over multiple years, acknowledging that business cycles do not always align with the fiscal year.

Allowing a Net Operating Loss NOL) Carryforward Can Be Justified