Which of the Following Statements Is Not Correct

question 33

Multiple Choice

Which of the following statements is not correct?

• A) Capital has a specified reimbursement date.
• B) Generally no return is guaranteed for capital providers.
• C) Capital is an investment at risk that implies the investor's participation (even nominal or virtual)in managerial decision making.
• D) Capital is provided by investors in exchange for a claim of the future returns of the business venture.

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Definitions:

Recognized Gain

The amount of gain that is subject to tax in the year of a transaction.

Realized Gain

The profit earned from the sale of an asset, such as stocks, bonds, or real estate, which becomes taxable when the asset is sold.

Selling Expenses

Expenses incurred directly or indirectly in making a sale, such as commissions, advertising costs, and shipping expenses.

Disallowed Loss

A loss that cannot be claimed for tax deduction purposes because it does not meet certain IRS criteria.