Identify Which of the Following Statements Is True

question 31

Multiple Choice

Identify which of the following statements is true.

• A)The method of accounting used by shareholders involved in a complete liquidation is relevant when determining the year in which the shareholder's gain or loss should be reported.
• B)An accrual method of accounting taxpayer recognizes his/her realized gain on a corporate liquidation when there has been actual or constructive receipt of the liquidating distribution(s).
• C)If a shareholder assumes or acquires liabilities of the liquidating corporation, the amount of these liabilities does not reduce the amount realized by the shareholder.
• D)All of the above are false.

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Definitions:

Available Seat

A term often used in the transportation industry, referring to a seat that is unoccupied and can be reserved or purchased by a customer.

Load Factor

A measurement used in transportation to assess the efficiency of a carrier by comparing the amount of utilized space or weight capacity versus the total available.

Operating Expense

Expenses incurred during the normal functioning of a business, excluding the cost of goods sold and fixed costs.

Yield

The amount of product or profit produced from a particular investment or process, measured in terms of return on investment or output per unit of input.