Which of the Following Statements Is Generally True When Comparing

question 35

Multiple Choice

Which of the following statements is generally true when comparing mutual funds to exchange traded funds?

• A)Exchange traded funds are more tax efficient than mutual funds.
• B)Mutual funds are more efficient than exchange traded funds.
• C)Exchange traded funds and mutual funds are equally tax efficient.
• D)In order to know which is more tax efficient we must first know what type of investments are held in the respective funds.

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Definitions:

Percentage of Completion

Percentage of completion is an accounting method used to recognize revenue and expenses of long-term projects proportionally to the work completed.

Realizable Revenue

The amount of revenue that is considered to be collectible from goods sold or services rendered.

Revenue Recognition

The accounting principle that income should be reported in the accounting period when it is earned, regardless of when the cash is received.

Percentage of Completion

An accounting method used to recognize revenues and expenses of long-term contracts as a percentage of work completed during the period.