Identify Which of the Following Statements Is True

question 67

Multiple Choice

Identify which of the following statements is true.

• A)A partner's relief of debt is treated as if the partner receives a cash distribution.
• B)When a partnership assumes any liabilities of the transferor, the transferor has an increase in the basis of his or her partnership interest.
• C)Gain recognized by a contributing partner because of the assumption of liabilities by the partnership increases the partnership's basis in the contributed property.
• D)All of the above are false.

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Definitions:

Increase in Accounts Receivable

A rise in the amount of money owed to the business by its customers for goods or services delivered.

Operating Activities

Transactions and events that enter into the determination of net income, including the production, sale, and delivery of a company's products and services.

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows and outflows a company receives.

Operating Activities

Operating activities are the day-to-day actions that involve the production, sales, and delivery of a company's products and services, reflected in its cash flow.