Which of the Following Constitutes a Realization

question 113

Multiple Choice

Which of the following constitutes a realization?
I.Frank's lakeside cottage is damaged in a violent storm. The cost of repairs totaled $4,000. However, the insurance company gives Frank only $2,500 for the repairs.
II.McDonald's cow gives birth. The calf will become a member of McDonald's feeder cattle herd.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Total Assets

The sum of all assets owned by an entity, including cash, investments, property, and other tangible and intangible assets, reflecting the company's overall value.

Equity Trusts

Investment funds that pool money from investors to purchase a diversified portfolio of equities, or stocks, managed by a professional fund manager.

Mortgage Trusts

Investment vehicles that pool mortgage loans and issue shares to investors, who receive dividends from the interest and principal payments made by borrowers.

REITs

Real Estate Investment Trusts, companies that own, operate, or finance income-generating real estate, allowing investors to invest in large-scale real estate properties.