In What Order Should the Tests to Determine a Partnership's

question 117

Multiple Choice

In what order should the tests to determine a partnership's year-end be applied?

• A)Majority interest taxable year; least aggregate deferral; principal partners test
• B)Principal partners test; majority interest taxable year; least aggregate deferral
• C)Principal partners test; least aggregate deferral; majority interest taxable year
• D)Majority interest taxable year; principal partners test; least aggregate deferral
• E)None of the choices are correct.

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Definitions:

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations and external investment sources.

Investing Activities

Transactions related to the acquisition or disposal of long-term assets and other investments not included in cash equivalents.

Bonds Payable

Long-term liabilities representing amounts owed by a corporation or government to bondholders, to be repaid at a specified future date.

Receipts

Records of transactions indicating payment made or received.