Identify Which of the Following Statements Is True

question 70

Multiple Choice

Identify which of the following statements is true.

• A)In general, a noncorporate shareholder that receives a distribution in complete liquidation of the liquidating corporation recognizes his or her entire realized gain as a capital gain.
• B)The basis for nonmoney property received by a noncorporate shareholder as part of a liquidating distribution is the same as its basis on the books of the liquidating corporation.
• C)The liquidating corporation does not recognize gains and losses when making a distribution of nonmoney property.
• D)All of the above are false.

---

Definitions:

Credit

The provision of resources (such as money) by one party to another, with the expectation that the resources will be repaid, often with interest, at a later date.

Net 45

A payment term indicating that full payment is expected within 45 days from the invoice date.

Economic Order Quantity

A formula used to determine the most efficient quantity to order to minimize the costs associated with buying, holding and stockout.

Carrying Costs

Expenses associated with holding or maintaining an inventory, including storage, insurance, and taxes.