Which of the Following Does Not Ultimately Result in a Capital

question 101

Multiple Choice

Which of the following does not ultimately result in a capital gain or loss?

• A) Gain on equipment used in a trade or business held for more than one year, if it is the only asset sale during the year.
• B) Sale of inventory.
• C) Sale of a personal use asset.
• D) Sale of capital stock in another company.
• E) None of the choices are correct.

Analyze the financial impact of currency exchange rate fluctuations on the financial statements of foreign subsidiaries.

Apply the principle of foreign currency translation to prepare a balance sheet and statement of cash flows.

Identify and understand the justification and circumstances requiring the remeasurement of foreign currency transactions.

Distinguish between the functional currency and reporting currency in the context of foreign operations.

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Definitions:

Manufacturers' Agents

Independent sales agents who work on behalf of manufacturers to sell their products to wholesalers and retailers.

Noncompetitive

Refers to a situation or environment where there is little to no competition between businesses or individuals.

Exclusive Territory

A business agreement in which a franchisor grants a franchisee the sole right to sell or distribute products or services in a specified geographic area.

Cash and Carry

A type of trade where goods are paid for in full at the time of purchase and taken away by the buyer immediately.