Accounts Receivable May Be Used as a Source of Financing

question 23

Multiple Choice

Accounts receivable may be used as a source of financing by:

• A) collecting the receivables.
• B) writing off the receivables as bad debt expense.
• C) buying securities backed by the receivables.
• D) factoring the receivables to a finance company.

Recognize the tax effects of non-monetary contributions to a partnership.

Understand the allocation of partnership income and expenses among partners.

Learn the fundamentals of partnership depreciation methods for contributed properties.

Understand the difference between active and passive participation in business activities.

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Definitions:

Journal Entries

Recording of financial transactions in a ledger, such that the total debits equals the total credits, reflecting all changes in accounts within a particular accounting period.

Fiscal Year-End

The fiscal year-end is the conclusion of a 12-month or 365-day period that a company uses for accounting purposes and preparing financial statements, which does not necessarily coincide with the calendar year.

Deferred Income Tax Liability

A tax obligation due in the future for income that has been recognized in the financial statements before it is taxable.

Tax Liability

Tax liability refers to the total amount of tax that an individual or entity is obligated to pay to a taxing authority, such as the government, based on income, property, and other applicable factors.