Which of the Following Does Not Ultimately Result in a Capital

question 34

Multiple Choice

Which of the following does not ultimately result in a capital gain or loss?

• A)Sale of a personal use asset.
• B)Sale of inventory.
• C)Gain on equipment used in a trade or business held for more than one year,if it is the only asset sale during the year.
• D)Sale of capital stock in another company.
• E)None of thesE.Inventory is always an ordinary asset because it is held in the ordinary course of a trade or business.

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Definitions:

Working Capital

The measure of a company's operational liquidity, calculated as current assets minus current liabilities.

Economic Downturns

Periods of reduced economic activity characterized by declines in GDP, employment, and trade, often leading to increased unemployment and financial hardship.

Foreign Direct Investment

Capital allocated by a firm or person from one country into commercial interests within a different country, achieved by creating business entities or buying business resources.

Developing Countries

Nations with a lower living standard, underdeveloped industrial base, and low Human Development Index relative to other countries.