On June10,2011,Ebon,Inc

question 126

Multiple Choice

On June10,2011,Ebon,Inc.acquired an office building as a result of a like-kind exchange.Ebon had given up a factory building that it had owned for 26 months as part of the like-kind exchange.Which of the statements below is correct?

• A) The holding period of the office building does not include the holding period of the factory building.
• B) The holding period of the factory building starts on June 11, 2011.
• C) The holding period of the factory building starts on June 10, 2011.
• D) The holding period of the office building includes the holding period of the factory building.
• E) None of the above.

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Definitions:

Receivables Ratio

The Receivables Ratio, also known as the Accounts Receivable Turnover Ratio, measures how efficiently a company collects cash from its customers by comparing sales to the average receivables.

Outstanding Accounts

Accounts or invoices that have been billed but not yet paid by customers.

EBIT

Earnings Before Interest and Taxes, a financial metric indicating a company's operating profitability by excluding interest and taxes from earnings.

Interest Expense

The cost incurred by an entity for borrowed funds; interest expenses are a non-operational cost affecting the company’s net income.