Which of the Following Statements Is Correct

question 143

Multiple Choice

Which of the following statements is correct?

• A) The sale of an unincorporated sole proprietorship is always treated as the sale of the individual business assets.
• B) The sale of a partnership is treated as the sale of the individual assets only if the sales transaction is structured as the sale of the individual assets.
• C) The sale of a corporation is either treated as the sale of the corporate stock or as the sale of the individual assets.
• D) Only a. and b. are correct.
• E) a., b., and c. are correct.

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Definitions:

Conversion Cost

The sum of direct labor costs and manufacturing overhead costs, representing the total expense to convert raw materials into finished goods.

Sales Revenue

The total revenue earned from selling products or services before deducting any costs.

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured.

Differential Cost

The difference in total cost between two alternatives, highlighting how costs change under different operational decisions.