Frisco Inc

question 5

True/False

Frisco Inc.,a C corporation,placed a building in service in 2002 and deducted straight-line depreciation under the MACRS system in the normal manner.It sold the building this year for a substantial gain.Because straight-line depreciation was used,Frisco will not need to recognize any ordinary gain.

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Definitions:

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing what the owner has invested or kept in the business.

Proprietorship

A business structure owned by a single individual, where the owner and the business are legally treated as the same entity.

Accounting Principles

The standardized rules and guidelines that companies are required to follow when reporting financial data, ensuring consistency, reliability, and comparability of financial statements.

Owner's Equity

The residual interest in the assets of a company after deducting liabilities, representing the owners' share of the company’s assets.