Identify Which of the Following Statements Is True

question 99

Multiple Choice

Identify which of the following statements is true.

• A)In a tax-free reorganization, the acquiring corporation's holding period for the acquired properties includes the period of time the target corporation held the properties.
• B)In a tax-free reorganization, if the acquiring corporation uses nonmonetary boot property, gains or losses will be recognized by the acquiring corporation.
• C)The receipt of cash by a shareholder results in the recognition of all of his or her realized gain even if the transaction qualifies as a tax-free reorganization.
• D)All of the above are false.

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Definitions:

Break-Even Point

The sales volume at which net income is zero; the intersection of the total cost and total revenue lines on a break-even chart.

Break-Even Point

The point at which costs or expenses and revenue are equal, resulting in no net loss or gain from a business or investment.

Variable Cost

Variable cost is the cost that changes in direct proportion to the volume of output or activity in production, services, or other cost-incurred activities.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.