Which of the Following Describes a Special-Purpose Entity

question 12

Multiple Choice

Which of the following describes a special-purpose entity?

• A)Entities with limited lives that a company creates to achieve a specific objective.
• B)An association of two or more entities for the purpose of achieving a specific goal.
• C)Corporations that U.S.tax laws treat as partnerships,and they do not pay income taxes.
• D)A special type of partnership that confines the limited partner's potential loss to the amount of his or her investment.

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Definitions:

Marginal Revenue

The additional income received from selling one more unit of a good or service.

Bulk Sale

The sale of large quantities of goods to a buyer, typically at a reduced price, often used in wholesale transactions or when selling commodities.

Reserved Quantity

The amount of inventory set aside or reserved for a specific purpose or customer, not available for general sale or use.

Spot Market

A public financial market in which commodities, securities, or currencies are traded for immediate delivery and payment, contrasting with futures or options markets.