An Expense Account Normally Has a Credit Balance

question 111

True/False

An expense account normally has a credit balance.

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Definitions:

Section 1245

A section of the U.S. Internal Revenue Code that deals with the tax treatment of depreciable property and requires the recapture of depreciation upon sale of the property as ordinary income.

Section 1231

A tax provision related to the treatment of gains and losses on property used in a trade or business or held for the production of income.

Depreciation

A method of allocating the cost of a tangible asset over its useful life.

Short-Term Capital Loss

A loss realized from the sale of a capital asset, such as stock, held for one year or less, which can be used to offset capital gains for tax purposes.