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:

Expense Accounts

Expense accounts track the costs incurred by a business in the course of its operations, such as utilities, rent, and payroll.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments, used in the preparation of financial statements.

Closing Entry

An accounting procedure used to transfer balances from temporary accounts to permanent ones at the end of an accounting period, thereby preparing the temporary accounts for the next period.

Income or Loss

The financial result of an organization's operations over a specific period, calculated as revenue minus expenses, indicating profitability or a deficit.