Match Each of the Definitions That Follow with the Appropriate

question 112

Short Answer

Match each of the definitions that follow with the appropriate investment term (a-j).
-when using this, dividends are treated as a reduction of the investment
A)debt securities
B)equity securities
C)investor
D)investee
E)fair value method
F)trading securities
G)available-for-sale securities
H)held-to-maturity securities
I)equity method
J)business combination

• A)debt securities
• B)equity securities
• C)investor
• D)investee
• E)fair value method
• F)trading securities
• G)available-for-sale securities
• H)held-to-maturity securities
• I)equity method
• J)business combination

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Definitions:

Involuntary Conversion

A forced change of property ownership or destruction, such as through theft or natural disaster, that may have tax implications.

Installment Method

is an accounting technique used to recognize revenue and expenses over time as payments are made or received, rather than at the time of transaction.

Basis

The amount of an investment in property for tax purposes; used to calculate gain or loss on a sale or other disposition of the property.

Gain Recognized

The profit realized from the sale or exchange of an asset, which must be reported for tax purposes.