Identify Which of the Following Statements Is True

question 50

Multiple Choice

Identify which of the following statements is true.

• A)A liquidating distribution that terminates a partnership interest cannot include more than one distribution.
• B)A partnership with a large amount of unrealized receivables and substantially appreciated inventory items liquidated and distributed all of its assets in kind to each partner in proportion to their partnership interests. Each partner will report ordinary income at the time these assets are received equal to their FMV.
• C)The rule for recognizing gain on a liquidating distribution is the same rule that is used for a current distribution.
• D)All of the above are false.

---

Definitions:

Annual Interest

The amount of interest due over the course of a year on borrowed capital or invested funds.

Accounting Profits

The difference between a company's total revenue and its explicit costs, not including opportunity costs.

Savings Account

A deposit account held at a bank or financial institution that pays interest but typically has limited transactions.

Loan

Borrowed money that is expected to be paid back with interest to the lender, according to agreed terms and conditions.