Lew Owns Five Activities, and He Elects Not to Group

question 73

Multiple Choice

Lew owns five activities, and he elects not to group them together as a single activity under the "appropriate economic unit" standard. During the year, he participates for 120 hours in Activity A, 150 hours in Activity B, 140 hours in Activity C, 110 hours in Activity D, and 100 hours in Activity E. Which of the following statements is correct?

• A) Activities A, B, C, D, and E are all significant participation activities.
• B) Lew is a material participant in Activities A, B, C, and D only.
• C) Lew is a material participant in Activities A, B, C, D, and E.
• D) None of the above.

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Definitions:

Generated Revenue

The total amount of income produced from the sale of goods, services, or other capital activities within a given period.

Service Delivered

The act of providing a service to customers, encompassing everything from the initial offer to the end-user experience.

Profits Realized

The net income a company earns after all expenses, taxes, and costs have been deducted from total revenue, reflecting actual financial gain.

Dependability

The quality of being trustworthy and reliable, especially in delivering services or products.