Classify the Gain or Loss on Each of George's Assets

question 32

Multiple Choice

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all.
-George sells his personal use automobile at a loss of $4,300.

• A)Long-term capital
• B)Short-term capital
• C)Collectible gain
• D)Section 1231
• E)Section 1245
• F)Section 1250
• G)Ordinary income/loss
• H)Nontaxable/nondeductible

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Definitions:

Accounts Payable

An entry in financial accounts showing a corporation's duty to reimburse a short-term loan from its creditors or vendors.

Total Assets

The sum of all current and non-current assets owned by a company, representing the total resources that can be used to generate future income.

Total Liabilities

The total amount of financial obligations a company owes to outside parties, including loans, bonds, accounts payable, and other debts.

On Account

A term indicating that a purchase has been made or services have been ordered with payment to be made at a later date, typically used in accrual accounting.