Under the Modified Accrual Basis of Accounting, Gains and Losses

question 14

Multiple Choice

Under the modified accrual basis of accounting, gains and losses on disposal of capital assets

• A)are not recognized.
• B)are recognized when the proceeds (cash)of the sale are received (on the installment basis).
• C)are recognized only if there is a gain.
• D)are recognized when the sale occurs, regardless of when the cash is collected.

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Definitions:

Tort

A civil wrong not arising from a breach of contract. A breach of a legal duty that causes harm or injury to another.

Corporate Law

A branch of law that deals with the formation, governance, and operations of corporations and their relationship with stakeholders.

Shareholders' Meetings

Gatherings of the owners of a corporation's shares to discuss corporate governance and make important decisions.

Stock Certificates

Physical documents certifying ownership of a specific number of shares or stock in a corporation.