Calvin Transfers Land to a Trust

question 46

Multiple Choice

Calvin transfers land to a trust. Calvin retains the right to the income from the land for the rest of his life. Upon his death, the land is to be transferred to his daughter, Melissa. Calvin's interest is

• A)a remainder interest.
• B)a life estate.
• C)a reversionary interest.
• D)a term certain.

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of a company.

Current Assets

Assets on a balance sheet that are expected to be converted into cash, sold, or consumed within a year.

Current Liabilities

Financial obligations a company must pay within a year, such as loans, accounts payable, and other debts.

Working Capital Ratio

A financial metric that measures a company's efficiency and its short-term financial health by comparing current assets to current liabilities.