Identify Which of the Following Statements Is True

question 25

Multiple Choice

Identify which of the following statements is true.

• A) Partnerships make most of the tax elections for the partnership rather than the partners.
• B) A partner can elect the depreciation method to be applied to the partner's share of the partnership's depreciable assets.
• C) The Fisher Partnership is owned equally by four individual partners. Two of the partners have fiscal years ending March 31 and two partners have fiscal years ending June 30. The partnership has a natural business year. The partnership must adopt a calendar year for tax reporting purposes unless a Sec. 444 election is made.
• D) All of the above are false.

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Definitions:

Capital Structure

This term describes the mix of debt and equity that a company uses to finance its operations and growth.

Debt

An amount of money borrowed by one party from another, under the condition it will be paid back with interest, often used for investments, operations, or purchases.

Equity

The value of an ownership interest in a company, representing shareholders' stake after debts and liabilities have been settled.

Capital Budgeting

The process that a business uses to evaluate potential major investment or expenditure projects, using various techniques to determine their value.