Which of the Following Statements About Alimony Payments Is True

question 95

Multiple Choice

Which of the following statements about alimony payments is true?

• A) To qualify as alimony, payments must be made under a written agreement or divorce decree that does not designate the payments as "nonalimony" or child
• Support.
• B) To qualify as alimony, payments must be made in cash.
• C) Alimony payments are includible in the gross income of the recipient.
• D) To qualify as alimony, payments cannot continue after the death of the recipient.
• E) All of the choices are correct.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security representing an ownership share in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Retained Earnings Account

An equity account that represents the accumulated portion of net income that a company has decided to retain, rather than distribute among shareholders in the form of dividends.

Stock Dividend

A payment made in the form of additional shares rather than cash, distributed to shareholders from the company's existing stock.

Cash Dividends Payable

A liability account on a company’s balance sheet representing the amount of dividends declared by the board of directors but not yet paid out to shareholders.