Question

In: Accounting

Which of the following statements is incorrect concerning the disposition of an installment note? a. Installment...

Which of the following statements is incorrect concerning the disposition of an installment note? a. Installment treatment is not allowed for sale of securities traded on established markets. b. The installment method may not be used to report gains from sales of any property produced in the business of farming c. Failure to charge adequate interest may result in imputed interest at Federal rate. d. Disposition of property by related purchaser within 2 years after the sale generally accelerates recognition of gain on installment obligation for related seller.

Solutions

Expert Solution

The statement D is incorrect.

Explanation

Instalment reporting cannot be used dor certain assets including sale of inventory and sale of securities traded on etsblished market.

A dealer disposition does not include any dispostion on the instalment plan of any property used or produced in the trade or business of farming. The exception is to this is sale of farm equipmet to farmers by the manufacturers of the euipment.

If the intslment salecontract does not provide for adequate interest using the applicable federal rate then interest will be imputed. Generally, interest income, stated or imputed will be taxed as ordinary income.

The disposition of property by related purchaser with in 2 years after the sale does not accelerate recognition of gain on instalmet obligation for related seller. The seller is only liable for the proceeds from the initial contract with the purchaser.


Related Solutions

Which of the following statements is incorrect concerning the disposition of an installment note? a. Installment...
Which of the following statements is incorrect concerning the disposition of an installment note? a. Installment treatment is not allowed for sale of securities traded on established markets. b. The installment method may not be used to report gains from sales of any property produced in the business of farming c. Failure to charge adequate interest may result in imputed interest at Federal rate. d. Disposition of property by related purchaser within 2 years after the sale generally accelerates recognition...
Which of the following statements concerning the separation of powers doctrine is incorrect
Which of the following statements concerning the separation of powers doctrine is incorrect?A. It promotes good governmentB. It involves three organs of state, namely, the executive, the judiciary and the legislatureC. All arms of government must overlapD. It ensures that case law is persuasive
Concerning penile erection, which of the following statements is incorrect? a) The parasympathetic nervous system releases...
Concerning penile erection, which of the following statements is incorrect? a) The parasympathetic nervous system releases nitric oxide b) Nitric oxide activates a G-protein coupled receptor which generates cGMP c) Cytosolic level of cGMP increases d) The cytosolic calcium concentration decreases and this leads to vasodilation e) The sinuses in the corpora cavernosa become engorged with blood Which of the following statements about gastric acid secretion is true? a) In an unstimulated parietal cell the amount of H+-K+-ATPase present is...
Which of the following statements concerning the variance are correct? (NOTE: THERE CAN BE MORE THAN...
Which of the following statements concerning the variance are correct? (NOTE: THERE CAN BE MORE THAN ONE CORRECT ANSWER) a.The larger the variance, the greater the total risk of the investment. b.If a stock portfolio is well-diversified, then the portfolio variance may be less than the variance of the least risky stock in the portfolio. c.The larger the variance, the smaller the standard deviation. d.The larger the variance, the more the actual returns tend to differ from the average return....
74. Which of the following statements is incorrect?                                  &nbsp
74. Which of the following statements is incorrect?                                                                                                                      A. β- hemolytic Streptococci show complete clearing around the colonies on Blood Agar.                         B. Stapylococci can be isolated on Phenyl Ethanol Agar and always ferment mannitol on Mannitol Salt Agar.                                                                                                                                    C. Chocolate agar provides NAD and hemin thus supports the growth of Haemophilus influenzae                                                                                                                                                   D. Salmonella appears as yellow colonies with black centers on Salmonella-Shigella agar 75. Which of the following statements is incorrect?                                                                                           A. Typhoid fever is a systemic...
Which one of the following statements is incorrect?
Which one of the following statements is incorrect? 1) Scarcity is a universal phenomenon that arises because resources are limited 2) Microeconomics is the branch of economics which studies how individual decision-makers behave and interact with each other 3) Macroeconomics is the branch of economics which studies the functioning and performance of a society's economy as a whole (often with a focus on levels of and changes in aggregate measures such as the unemployment rate, inflation rate, and Gross Domestic Product growth rate). 4)...
Which of the following statements is incorrect? Select all that apply.
 Which of the following statements is incorrect? Select all that apply. The eukaryotic ribosome uses both the 5' cap and the 3' tail to correctly position the ribosome on the initation codon GTP is hydrolyzed by aminoacyl-tRNA synthetases to prepare amino acids for attachment to tRNAs The peptidyl-transferase activity of the ribosome is catalyzed by one of the protein domains of the large ribosomal subunit The Shine-Dalgarno consensus sequence is located downstream of the initiation codon and base pairs with the 16S rRNA of...
Which of the following statements is INCORRECT regarding Master Budget?
Which of the following statements is INCORRECT regarding Master Budget? 1 Master budget is one type of operational budget 2. Master budget is focusing specific volume of business activity that is expected. 3 Budgeted balance sheet should be prepared before budgeted income statement. 4. Master budget starts from preparing sales budget.
Which of the following statements concerning depreciation is false?
Which of the following statements concerning depreciation is false?                        a.         Depreciation expense occurs because the cost of long-term assets such as buildings and equipment must be matched to the revenues produced by those assets.                        b.         Depreciation expense on the income statement “flows through” to the accumulated depreciation account on (or in the notes section of) the balance sheet.                        c.         The net property and equipment account on the balance sheet is equal to gross fixed assets plus accumulated depreciation.                        d.         Depreciation...
Which of the following statements about the autonomic nervous system is INCORRECT?
Which of the following statements about the autonomic nervous system is INCORRECT?  A The preganglionic fibres in the parasympathetic division are usually long compared to the postganglionic fibres  B The sympathetic division mediates responses that allow the body to respond to 'flight and fright' situations  C The ganglia of the sympathetic division are usually close to the spinal cord  D The adrenal medulla is a sympathetic ganglion  E The parasympathetic nerves arise from the brain stem and the sacral region...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT