Which Person Would Generally Be Treated as a Material Participant

question 123

Multiple Choice

Which person would generally be treated as a material participant in an activity?

• A)A participant in a rental activity
• B)A limited partner
• C)An LLC member not involved with management of the LLC
• D)A general partner

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Definitions:

External Reporting

The process of providing financial statement information to external stakeholders such as investors, creditors, and regulatory agencies.

Statement of Income

A financial document that shows a company's revenues, expenses, and profits or losses over a specific period of time.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Reconciliation

The process of ensuring two sets of records, such as bank statements and company ledgers, are in agreement, identifying discrepancies, and making adjustments if necessary.