Which of the Following Is Correct Concerning Short Sales of Stock

question 48

Multiple Choice

Which of the following is correct concerning short sales of stock?

• A)At the time the short sale is made,the taxpayer does not deliver to the purchaser the shares sold short.
• B)At the time the short sale is made,the taxpayer delivers to the purchaser the shares sold short.
• C)At the time the short sale is made,the taxpayer may already own the shares sold short.
• D)At the time the short sale is made,the taxpayer always already owns the shares sold short.
• E)None of these.

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Definitions:

Petty Cash Fund

A petty cash fund is a small amount of cash on hand used for paying expenses too small to merit writing a check.

Cash Short

A situation where the actual cash on hand is less than the expected amount, usually identified during cash reconciliation.

Journal Entry

An entry made in a journal that records a specific financial transaction, including amounts, accounts affected, and a description.

Control Procedures

These are policies and practices that organizations put in place to ensure the integrity of their financial and accounting information and to prevent fraud.