When a Liquidating Corporation Pays Off an Unsecured Debt Obligation

question 98

Multiple Choice

When a liquidating corporation pays off an unsecured debt obligation,

• A)the corporation recognizes no gain or loss if it uses appreciated property.
• B)the corporation recognizes no gain or loss if it uses cash.
• C)the corporation recognizes any gains but not losses realized.
• D)the corporation recognizes losses but not gains realized.

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Definitions:

Direct Material

Raw materials that can be directly identified and allocated to the production of specific goods or services.