Capital Gains Are Included in the Return on an Investment

question 20

Multiple Choice

Capital gains are included in the return on an investment:

• A)when either the investment is sold or the investment has been owned for at least one year.
• B)only if the investment is sold and the capital gain is realized.
• C)whenever dividends are paid.
• D)whether or not the investment is sold.
• E)only if the investment incurs a loss in value or is sold.

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Definitions:

Perpetual Inventory System

A financial recording technique that immediately documents inventory sales or acquisitions through computerized point-of-sale systems and software for managing enterprise assets.

Administrative Expenses

The costs related to the general administration of a business, such as salaries of senior executives, accounting, human resources, and information technology.

President's Salaries

Compensation or wage paid to the president of a company, often reflecting their role's responsibility and level of professional experience.

Depreciation

The planned allocation of a physical asset's cost over the time it remains useful.