Which of the Following Statements Regarding Low-Cost Articles Is Correct

question 5

Multiple Choice

Which of the following statements regarding low-cost articles is correct?
Which of the following statements regarding low-cost articles is correct?

• A)The distribution of low-cost articles can be classified as not being an unrelated trade or business.
• B)For 2017,a low-cost article is one that costs $10.70 or less.
• C)Any contributions received as the result of the distribution of low-cost articles must be included in unrelated business income.
• D)Only a.and b.are correct.
• E)a.,b.,and c.are correct.

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Definitions:

Bonus Method

An accounting technique used to record the transactions related to the admission of a new partner into a partnership by revaluing the existing partners' capital accounts.

Profits and Losses

A financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year.

Limited Liability Partnership

An agreement where a number of partners have their liabilities restricted, such that they are not individually accountable for the business's financial obligations.

Limited Liability Company

A flexible form of enterprise that blends elements of partnership and corporate structures, protecting members against personal liability beyond their investment.