Match Each of the Following Statements with the Terms Below

question 134

Multiple Choice

Match each of the following statements with the terms below that provide the best definition.
-Outside basis

• A)Adjusted basis of each partnership asset.
• B)Operating expenses incurred after entity is formed but before it begins doing business.
• C)Each partner's basis in the partnership.
• D)Reconciles book income to taxable income.
• E)Tax accounting election made by partnership.
• F)Tax accounting calculation made by partner.
• G)Tax accounting election made by partner.
• H)Does not include liabilities.
• I)Designed to prevent excessive deferral of taxation of partnership income.
• J)Amount that may be received by partner for performance of services for the partnership.
• K)Theory under which a partnership's recourse debt is shared among the partners.
• L)Will eventually be allocated to partner making tax-free property contribution to partnership.
• M)Partner's share of partnership items.
• N)Must generally be satisfied by any allocation to the partners.
• O)Justification for a tax year other than the required taxable year.
• P)No correct match is provided.

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Definitions:

EBIT

Earnings Before Interest and Taxes, a financial metric used to evaluate a company's operating performance.

Free Cash Flow

The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Capital Expenditures

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment to boost its long-term revenue.

Depreciation

The accounting method of allocating the cost of a physical or tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.