Charlotte Purchases a Residence for $105,000 on April 13,2004

question 34

Multiple Choice

Charlotte purchases a residence for $105,000 on April 13,2004.On July 1,2015,she marries Howard and they use Charlotte's house as their principal residence.If they sell their home for $390,000,incurring $20,000 of selling expenses and purchase another residence costing $350,000.Which of the following statements is/are correct concerning the sale of their personal residence?
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Purpose

The reason for which something is done or created, or for which something exists.

Voucher System

An accounting system that involves preparing and approving vouchers before transactions are recorded and payments made, to ensure financial controls.

Control Procedures

Measures and policies implemented by a company to ensure the integrity of financial and accounting information and compliance with laws and regulations.

Cash Equivalents

Temporary investments which can quickly be converted into specific cash sums and have a negligible risk of value fluctuation.