Which of the Following Is Not an Advantage of a Systematic

question 17

Multiple Choice

Which of the following is not an advantage of a systematic liquidation?

• A)maintaining control throughout the harvest period
• B)the harvesting of the investment value can be spread out over a number of years
• C)the taxation treatment of liquidation proceeds as ordinary income
• D)the time, effort, and costs of finding a buyer for the venture can be avoided

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Definitions:

Beginning Work

The value or quantity of inventory on hand at the start of a accounting period before any production or sales activities have occurred.

Process Inventory

Materials and goods that are currently in various stages of production within a manufacturing system, not yet completed as final products.

Cost Reconciliation Report

A financial report that explains the differences or reconciles the variances between the expected costs and the actual costs incurred.

Weighted-Average Method

A cost accounting technique used to allocate costs to inventory and cost of goods sold, averaging the costs of goods available for sale and assigning them to the units sold and remaining inventory.