A Purchase of Land in Exchange for a Long-Term Note

question 169

True/False

A purchase of land in exchange for a long-term note payable must be disclosed as a noncash investing and financing activity.

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Definitions:

Form 1099-INT

A tax form used to report interest income from banks, brokerage firms, and other financial institutions during the tax year.

Form 1040EZ

A simplified federal income tax form for individual taxpayers with straightforward tax situations, no longer in use after the 2018 tax year.

Income Tax Withholding

The process by which employers deduct a portion of employees' wages to pay directly to the government as prepayment for the employees' income tax liabilities.

Tax Liability

The total amount of tax owed by an individual, corporation, or other entity to a taxing authority, after deductions, credits, and exemptions.