If a Gain Is Realized on the Involuntary Conversion of Property,the

question 79

True/False

If a gain is realized on the involuntary conversion of property,the gain may be deferred if qualifying replacement property is acquired within a specified time period at a cost equal to or greater than the amount realized on the involuntary conversion.

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Definitions:

Memorandum Entry

This refers to a journal entry made in the financial records to note a significant event or transaction that doesn’t involve a direct exchange of cash or value and hence does not affect the financial statements directly.

Stock Option Plan

A compensation strategy that allows employees to purchase company stock at a predetermined price.

Liability Account

An account used in accounting to keep track of obligations or debts that a company owes to others, representing claims against the company's assets by external parties.

Stock Option Plans

Programs established by companies to give employees the right to purchase a specific number of the company's shares at a fixed price for a certain period of time.