Jacob Is Experiencing Cash Flow Problems During the Current Year

question 108

Multiple Choice

Jacob is experiencing cash flow problems during the current year. Rather than put the $80,000 business loan in default, his bank agrees to reduce the debt to $50,000. Prior to the debt reduction, Jacob's total assets were $500,000 and his total liabilities were $490,000. How much income must Jacob recognize from the reduction of his bank loan?

• A)- 0 -
• B)$10,000
• C)$20,000
• D)$30,000

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Definitions:

Institutional Review Board

An Institutional Review Board (IRB) is a committee established to review and approve research involving human subjects, ensuring that the study is ethical and the rights and welfare of participants are protected.

Ethics Review

A formal examination of research proposals to ensure they meet ethical standards, particularly regarding the treatment of participants and data handling.

Informed Consent

A legal and ethical requirement ensuring individuals are fully aware of and understand the implications of participating in a particular procedure or activity.

Deception

The act of misleading or lying to others, often used as a tactic in research to maintain the integrity of the study’s outcome.