Which of the Following Qualify as a Like-Kind Exchange

question 111

Multiple Choice

Which of the following qualify as a like-kind exchange?
-Microsoft common stock for Merrill Lynch common stock.

• A)qualifies as a like-kind exchange
• B)does not qualify as a like-kind exchange

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Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by a company, held in its own treasury.

Stockholders' Equity

Represents the owners' residual interest in the assets of a corporation after deducting liabilities.

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.