Which, If Any, of the Following Items Has No Effect

question 123

Multiple Choice

Which, if any, of the following items has no effect on the stock basis of an S corporation shareholder?

• A)Short-term capital loss.
• B)Long-term capital gain.
• C)Cost of goods sold.
• D)Net sales.
• E)A mortgage taken by the S corporation.

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Definitions:

Issuing Stock

The process by which a company sells new shares to investors to raise capital.

Financing Activity

Transactions and events where cash is raised from or repaid to investors, influencing the equity and debt of a company.

Cash

Money in the form of currency that can be used immediately for transactions.

General Ledger

The master set of accounts that summarizes all transactions occurring within an entity, serving as the main accounting record.