Final answer:
The correct statement related to loss carrybacks and carryforwards is (c), which says that the benefit due to a loss carryforward can be reported in both the loss year and future years, as it allows offsetting future profits with the current year's losses.
Step-by-step explanation:
The question pertains to tax accounting principles regarding loss carrybacks and carryforwards. These are strategies used by individuals and corporations to mitigate tax liabilities by applying current or future losses to past or future income for tax relief.
Statement (a) says The benefit due to a loss carryback can be reported in both the loss year and future years. This is incorrect because a loss carryback applies losses to preceding years' income, not future years, resulting in an immediate tax refund for taxes paid in those prior years. Statement (b) says The benefit due to a loss carryforward is reported only in the loss year. This is incorrect; a loss carryforward involves carrying the losses forward to offset taxable income in future years, not just in the loss year itself.
Statement (c) The benefit due to a loss carryforward can be reported in both the loss year and future years, is correct. Loss carryforwards allow businesses to use a current year loss to offset profits in future tax years. Finally, statement (d) says The benefit due to a loss carryback is reported only in the second year preceding the loss year, which is incorrect as the benefit from a loss carryback can apply to several preceding years, depending on the jurisdiction's tax laws.