Which of the Following Assets Held by a Cash Basis

question 111

Multiple Choice

Which of the following assets held by a cash basis accounting firm is a § 1231 asset?

• A) An account receivable from a client.
• B) A desk used in the business and held more than one year.
• C) An investment in Orange Company common stock.
• D) A computer used in the business, held more than one year, but fully depreciated under § 179 when acquired.
• E) b. and d.

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Definitions:

Amortization

A process of spreading out a loan's cost over its lifespan, reducing the value of an intangible asset or debt over a specified period.

Projected Benefit Obligation

An estimate of the total amount of benefits to be paid out to employees in a defined benefit pension plan, based on current and future salary levels.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows, reflecting the risk and time value of money.

Pension Expense

The cost recognized by an employer for maintaining a pension plan for its employees during a reporting period.