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Which of the following correctly describes the treatment of the cost of goods sold on Form 1120? A. It carries to the Income section and
Which of the following correctly describes the treatment of the cost of goods sold on Form 1120?
A. It carries to the Income section and reduces total income.
B. It is entered in the Deduction section and reduces taxable income.
C. Income from the sale of goods is exclude from gross income on the tax return to the extent of cost of goods sold.
D. It increases shareholders basis and will be recovered only when the business is sold.
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