Identify Which of the Following Statements Is False

question 83

Multiple Choice

Identify which of the following statements is false.

• A)The acquiring corporation does not recognize gains or losses under Sec. 1001 when it transfers noncash boot property to the target corporation or its shareholders.
• B)Gain recognized by a shareholder in a tax-free reorganization may be characterized as a dividend.
• C)If no gain or loss is recognized by a stock or security holder in a tax-free reorganization, the stock or securities received take a substituted basis equal to the basis of the shares or securities surrendered.
• D)Tax-free reorganizations generally do not involve actual redemptions of the stock of the target corporation's shareholders.

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Definitions:

Ending Inventory

is the total value of all inventory a company has in stock at the end of its financial period, important for determining cost of goods sold and net income.

Perpetual Inventory System

A method of accounting for inventory that continuously updates inventory records after each purchase or sale.

FIFO Periodic Inventory Method

The first-in, first-out (FIFO) periodic inventory method assumes that goods sold are those that were added to the inventory earliest, calculated periodically at the end of a reporting period.

Ending Inventory

Goods' valuation ready for trading at the end of a bookkeeping period.