Classify Each of the Following Statements

question 100

Multiple Choice

Classify each of the following statements:
-Harry pays for the tuition for his niece to attend Derrick University. The niece does not qualify as Harry's dependent.

• A)No taxable transfer occurs.
• B)Gift tax applies.
• C)Estate tax applies.

---

Definitions:

Temporary Accounts

Income statement (and sometimes Dividends Declared) accounts that are closed to Retained Earnings at the end of the accounting period.

Balance Sheet

A summary report of a company's financial position, including assets, liabilities, and the equity of its shareholders, at a distinct time.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profit or loss.

Year-End Closing Process

The Year-End Closing Process involves finalizing a company's financial activities for the year, updating accounts, and preparing financial statements.