Which of the Following Statements Regarding Low-Cost Articles Is Correct

question 157

Multiple Choice

Which of the following statements regarding low-cost articles is correct?

• A) The distribution of low-cost articles can be classified as not being an unrelated trade or business.
• B) For 2014, a low-cost article is one that costs $10.40 or less.
• C) Any contributions received as the result of the distribution of low-cost articles must be included in unrelated business income.
• D) Only a. and b. are correct.
• E) a., b., and c. are correct.

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Definitions:

Positive Profits

A financial gain that occurs when the revenues generated from business activities exceed the costs and expenses involved in operating the business.

Shut Down

A short-term decision by a firm to cease production due to unfavorable market conditions.

Firm

An entity like a corporation, partnership, or sole proprietorship engaged in selling goods or services for financial gain.

Price

The sum of money needed to buy a product, service, or asset.