Identify Which of the Following Statements Is True

question 91

Multiple Choice

Identify which of the following statements is true.

• A) The rule for recognizing gain on a liquidating distribution is the same rule that is used for a current distribution.
• B) A liquidating distribution that terminates a partnership interest cannot include more than one distribution.
• C) 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.
• D) All of the above are false.

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Definitions:

Store Equipment

The fixtures, machinery, and tools used in the operation of a retail store, often categorized as fixed assets on the balance sheet.

Book Value

The value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization, or impairment costs made against the asset.

Unearned Ticket Revenue

Unearned ticket revenue is money received from ticket sales before the event or service has been provided, considered a liability until the service is rendered.

Season Tickets

Tickets sold for a set of events, usually for a sports season, concerts, or theatre productions, allowing the holder to attend all events in the series.