A Simple Trust

question 15

Multiple Choice

A simple trust

• A)may make charitable distributions.
• B)may make discretionary distributions of principal.
• C)may accumulate income.
• D)is required to distribute all of its income currently.

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Definitions:

Prepaid Insurance

An asset account that represents insurance premiums paid in advance, which are expensed over the period the insurance coverage relates to.

Current Asset

Asset expected to be converted into cash, sold, or consumed within a year or within the business's operating cycle.

Liability Subsections

The divisions within the liabilities section of a balance sheet, categorizing liabilities based on their nature or duration, such as current liabilities and long-term liabilities.

Long-Term Liabilities

Liabilities that usually will not be due for more than one year.