Losses from ________ exposure generally reduce taxable income in the year they are realized. ________ exposure losses may reduce taxes over a series of years.
A) accounting; Operating
B) operating; Transaction
C) transaction; Operating
D) transaction; Accounting

Question

Quizplus · Accepted Answer

Losses from transaction exposure may reduce taxes over a series of years because they are related to foreign currency transactions and can have a long-term impact on the company's financial performance. On the other hand, operating exposure losses are related to the company's core operations and are typically one-time expenses that affect taxable income in the year they are realized. Accounting exposure refers to the impact of fluctuating currency exchange rates on a company's financial statements and does not directly affect taxable income.

Losses from ________ Exposure Generally Reduce Taxable Income in the Year