A Trustee Has a Duty to Make Proper Allocation of Benefits

question 21

Multiple Choice

A trustee has a duty to make proper allocation of benefits and burdens between income beneficiaries and remaindermen.Which of the following statements is true concerning this allocation?

• A) Any profit from the use of trust property is allocated to the remaindermen.
• B) Current expenses are chargeable to the remaindermen.
• C) Extraordinary expenses are chargeable to the remaindermen.
• D) Money paid for the use of trust property is chargeable to the remaindermen.

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Definitions:

Free Cash Flow

The amount of cash generated by a business after accounting for capital expenditures needed to maintain or expand the asset base.

Common Stock

A type of security that represents ownership in a corporation, entitling the shareholder to a proportion of the corporation's assets and profits.

Depreciation

The systematic allocation of the cost of an asset over its useful life.

Net Income

The total revenue of a company minus its expenses, taxes, and the cost of goods sold, indicating the company's profit.