The Key Difference Between Mutual Funds and Separately Managed Accounts

question 24

Multiple Choice

The key difference between mutual funds and separately managed accounts is that:

• A)Mutual funds are taxed as capital gains while separately managed accounts are not
• B)Separately managed accounts are taxed as capital gains while mutual funds are not
• C)There is no difference between the two
• D)Mutual funds pool all investor funds in one account while separate accounts investors own stocks and bonds that are placed in their name in a segregated account
• E)None of the above

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Definitions:

Adjusting Entry

Documentation produced at a period's end within accounting to properly allocate profits and outlays to the actual period they happened.

Closing Entry

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thereby preparing the books for the next accounting period.

Post-Closing Trial Balance

A list of all account balances after the closing entries have been made, ensuring the accuracy of the ledger.

Fees Earned

Revenue recognized by a company for services provided during a specific period, even if not yet received in cash.