Although Drop Shippers Own Merchandise They Have Shipped to Buyers

question 248

True/False

Although drop shippers own merchandise they have shipped to buyers, they do not actually handle, stock, or deliver this merchandise themselves.

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Definitions:

Equipment

Tangible property used in the operation of a business, such as machinery, computers, and furniture, often subject to depreciation over its useful life.

Current Cash Distribution

Current Cash Distribution refers to the amount of cash distributed to the investors or partners of a business at the present time.

Long-term Capital Gains

Profits from the sale of an asset held for more than a year, generally taxed at lower rates than ordinary income.

Ordinary Income

Income earned from providing services or the sale of goods, typically subject to standard tax rates, as opposed to income classified as capital gains.