Nate Is a Partner in a Partnership That Received $5,000

question 57

Multiple Choice

Nate is a partner in a partnership that received $5,000 of interest income this year.Nate's share of the interest is $1,000, and he should report this income on his individual return as:

• A)business income.
• B)income from a partnership.
• C)interest income.
• D)dividend income because the partnership intends to organize next year as a limited liability company.
• E)All of these choices are correct.

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Definitions:

Cost of Goods Sold

The total cost incurred by a company to manufacture or acquire products sold during a specific period.

Raw Materials

Basic materials used in the manufacturing process to produce goods, often processed in several stages into components or finished products.

Work in Process

This includes partially finished goods that are in the process of being manufactured but are not yet complete.

Job-order Costing

A costing system used to determine the cost of producing specific jobs or batches, where costs are assigned to each job individually.