The Need to Determine Whether Property Is Real or Personal

question 36

Multiple Choice

The need to determine whether property is real or personal frequently arises. Which of the following would not be classified as real property?

• A) airspace over a condominium project
• B) newly planted fruit trees
• C) stock in a real estate corporation
• D) minerals in the ground before they are mined

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Definitions:

Unearned Legal Fees

Money received by an entity for legal services yet to be performed, recognized as a liability until the services are rendered.

Adjusting Entry

A journal entry made at the end of an accounting period to update the ledger accounts for accruals, deferrals, and other adjustments necessary to ensure accurate financial reports.

Revenue Account

A revenue account tracks the income generated from a company's primary operations, such as sales of goods and services, during an accounting period.

Unearned Management Fees

Income received by a business for services that have not yet been rendered, considered a liability until the service is provided.