In a Proportionate Current (Nonliquidating) Distribution, Cash Is Deemed to Be

question 158

True/False

In a proportionate current (nonliquidating) distribution, cash is deemed to be distributed first followed by capital and §
1231 assets, and last, unrealized receivables and inventory.

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Definitions:

Equivalent Units

A concept used in process costing that converts partially completed units into a number of fully completed units, based on the percentage completion of those units.

Conversion

The process of changing raw materials into finished products or turning prospects into customers, depending on the context.

Weighted-Average Method

A method of inventory valuation which calculates the cost of goods sold and ending inventory based on the average cost of all units available for sale during the period.

Equivalent Units

A concept in cost accounting used to express the amount of work done on partially finished goods in terms of fully finished units.