Which of the Following Statements Is True Regarding Partnership Operating

question 6

Multiple Choice

Which of the following statements is true regarding partnership operating distributions?

• A)If a partner's outside basis is greater than the bases of the assets distributed in an operating distribution, the partner will recognize a loss.
• B)If a partner's outside basis is less than the bases of the assets distributed in an operating distribution, the partner will recognize a loss.
• C)If a partner's outside basis is greater than the bases of the assets distributed in an operating distribution, the partner will recognize a gain.
• D)None of the statements are true.

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Definitions:

Activity Cost Pool

A grouping of all the costs related to a particular activity in the process of costing in an activity-based costing system.

Meeting With Clients

A scheduled appointment or gathering between a business and its clients aimed at discussing issues, making decisions, or fostering relationships.

Designing Products

The process of creating a new product to meet customer needs or market demand, involving concept creation, design, and development.

Activity Cost Pool

A way to group all the costs related to a specific activity or process, used in activity-based costing.