If Property Contributed to a Partnership Is Subject to a Liability

question 58

True/False

If property contributed to a partnership is subject to a liability (assumed by the partnership), gain is recognized to the contributing partner to the extent of the liability.

---

Definitions:

Activity-Based Costing

A pricing approach that allocates overhead and indirect expenses to associated goods and services according to their consumption of resources.

Product Costs

Costs that are directly associated with the creation of a product, including materials, labor, and manufacturing overhead.

Activity-Based Costing

A pricing technique that allocates overhead and indirect expenses to corresponding products and services according to the activities they necessitate.

Plantwide Factory Overhead Allocation

Plantwide factory overhead allocation involves spreading all of the indirect costs of operating a manufacturing plant across all products based on a single cost driver.