The General Rule Regarding the Exchanged Basis in the New

question 15

Multiple Choice

The general rule regarding the exchanged basis in the new property received in a like-kind exchange is:

• A) The basis is equal to the cost basis of the old property.
• B) The basis is equal to the adjusted basis of the old property.
• C) The basis is equal to the fair market value of the new property.
• D) The basis is equal to the fair market value of the old property.
• E) All of the choices are correct.

---

Definitions:

Cash Receipts Journal

An accounting ledger in which all cash inflows or receipts are recorded.

Accounts Payable Subsidiary

A detailed ledger containing all individual creditor accounts, supporting the summary-level accounts payable figure in the general ledger.

Control Account

An account in the general ledger that summarizes and checks the accuracy of individual records in subsidiary ledgers.

General Ledger

A comprehensive set of accounts that records all transactions of a business, providing the foundation for financial statements.