Tom Participates for 100 Hours in Activity a and 450

question 98

True/False

Tom participates for 100 hours in Activity A and 450 hours in Activity B, both of which are nonrental businesses.
Both activities are active.

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Definitions:

Prior Period Adjustment

Corrections of material errors related to a prior period or periods, excluded from the determination of net income.

Retained Earnings

The portion of a company's profits that is kept or retained for reinvestment in the business, rather than being distributed to shareholders as dividends.

Stock Split

A corporate action to increase the number of outstanding shares by issuing more shares to current shareholders, proportionally decreasing the stock price.

Shares Outstanding

The total number of a company's shares of stock that are owned by shareholders, including both public investors and company insiders.