Question

Passive investment income means gross receipts generally are derived from which of the following? A. Gross...

Passive investment income means gross receipts generally are derived from which of the following?

A. Gross sales price on the sale of stocks or bonds

B. Interest earned by lending institutions

C. Interest earned on notes receivable from sales of inventory

D. Royalties, rents, dividends, interest, and annuities

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Correct answer - D. Royalties, rents, dividends, interest and annuities

Passive income, in a nutshell, is money that flows in on a regular basis without requiring a substantial amount of effort to create it. The idea is to make an upfront investment in time and/or money but once the ball is rolling, there's minimal maintenance required going forward.

A. Gross sales price on the sale of stocks or bonds is not an investment income. Income is sale price - cost price.

B. Interest earned by lending instituitions is in the nature of operating income since the primary business of a lending instituition is to lend money and earn interest on it. This is not in the nature of investment income.

C. Interest earned on notes receivable from sales of inventory is also operating in nature.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
True or False a.) A U.S. corporation’s gross profit from sale of inventory it manufactures in...
True or False a.) A U.S. corporation’s gross profit from sale of inventory it manufactures in the United States will be treated entirely as U.S. source income regardless of where title to the inventory passes to the buyer. b.) One of the goals of an income tax treaty between the United States and other countries is to reduce the withholding taxes imposed on cross-border payments such as dividends, interest, and royalties. c.) A U.S. corporation owning 100 percent of a...
Which of the following types of income is passive income? a. Net rental income from real...
Which of the following types of income is passive income? a. Net rental income from real estate limited partnership investments b. Dividends from domestic corporations c. Wages d. Interest income from certificates of deposit e. None of the above Which of the following is classified as active income? a. Self-employment income from a small business b. Interest income c. Limited partnership income d. Dividend income from a mutual fund e. a. and d. Nancy has active modified adjusted gross income...
Which one of the following is an example of investment income from​ securities? A. depreciation of...
Which one of the following is an example of investment income from​ securities? A. depreciation of long−term assets B. gain on the sale of fixed assets C. deferred tax assets D. interest earned from debt securities
I need to find which of the following assets and liabilities are current/short-term: Assets: Bonds ;...
I need to find which of the following assets and liabilities are current/short-term: Assets: Bonds ; Preferred stocks ; Common stocks ; Mortgage loans ; Real estate ; Cash, cash equivalents and short-term investments .; Contract loans ; Derivatives ; Securities lending collateral assets ; Other long-term investments ; Investment income due and accrued ; Net deferred federal income tax asset ; Other assets ; Separate account assets . Liabilities: Reserves for life and health insurance, annuities and deposit-type contracts...
The following schedule relates the income statement with cash flows from operating activities, derived by both...
The following schedule relates the income statement with cash flows from operating activities, derived by both the direct and indirect methods. The amounts for income statement elements are missing. Cash Flows from Operating Activities Income Statement Indirect Method Direct Method Net income $ ? Adjustments: Sales $ ? Decrease in accounts receivable 23 Cash received from customers $ 743 Cost of goods sold ? Increase in inventory (46 ) Decrease in accounts payable (59 ) Cash paid to suppliers (537...
.1. Which of the following is not a correct statement about accounting? a. Generally accepted accounting...
.1. Which of the following is not a correct statement about accounting? a. Generally accepted accounting principles (GAAP) is a set of accounting standards used in the preparation of financial statements. b. Financial Accounting Standards Board (FASB) is a private organization delegated by the Federal Reserve with the responsibility to establish the GAAP. c. Management accountants work with a business or nonprofit organizations, preparing reports and analyzing financial info. d. Public accountants provide a variety of accounting services for clients...
Which of the following statements is CORRECT? a. Operating income is derived from the firm's regular...
Which of the following statements is CORRECT? a. Operating income is derived from the firm's regular core business. Operating income is calculated as Revenues less Operating costs. Operating costs do not include interest or taxes. b. Depreciation reduces a firm's cash balance, so an increase in depreciation would normally lead to a reduction in the firm's cash flow. c. Depreciation is not a cash charge, so it does not have an effect on a firm's reported profits. d. The more...
1. A service company's net income can be expected to increase in which of the following...
1. A service company's net income can be expected to increase in which of the following scenarios involving an overall shortening of the operating cycle?       a. inventory cost savings are generated from decreasing the inventory turnover rate b. gross profit rate improvements due to less average number of days to sell inventory c. net sales increases due to less average number of days to collect accounts receivable d. none of the above 2. The cost of delivering merchandise to the...
26) The following are comparative balance sheets and an income statement for Wentworth Company. Wentworth Company...
26) The following are comparative balance sheets and an income statement for Wentworth Company. Wentworth Company Balance Sheets as of December 31 Assets 2018 2017 Cash $21,500 $120,000 Accounts receivable 195,000 105,000 Inventory 180,000 225,000 Long-term investments 0 60,000 Totals $396,500 $510,000 Liabilities and shareholders' equity Accounts payable $75,000 $120,000 Operating expenses payable 24,000 15,000 Bonds payable 70,000 100,000 Common stock 125,000 125,000 Retained earnings 102,500 150,000 Totals $396,500 $510,000 Wentworth Company Income Statement For the Year Ended December 31,...
Create a multiple-step income statement, statement of retained earnings, and classified balance sheet for the year...
Create a multiple-step income statement, statement of retained earnings, and classified balance sheet for the year ending December 31, 2018. These statements should be in an appropriate format. This means that the multiple-step income statement should present gross profit, operating, nonoperating, and nonrecurring items separately. This also means that the classified balance sheet should present current and long-term items separately. The statement of retained earnings only needs to present the “Retained Earnings” column from a Statement of Stockholders’ Equity. Information:...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT