20-35The Following Is One of Several Criteria a REIT Must

question 33

Multiple Choice

20-35.The following is one of several criteria a REIT must meet so as to be a tax-free entity:

• A) derive at least seventy-five percent of income from real estate related investments
• B) retain at least one-half of all income
• C) can not at any time sell off real estate assets
• D) none of the above

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Definitions:

Weighted Average Method

A method for calculating the cost of goods sold and the ending inventory value, which utilizes the average cost of all available sale items.

Joint Costs

Costs incurred when producing multiple products simultaneously, which cannot be easily attributed to a single product.

Weight Factor

A factor assigned to each product in a joint manufacturing process representing its importance in comparison to the other products.

Support Department

A division within a company that provides essential services or backup to the production or operations departments, not directly producing goods or services.