With respect to simple trusts, all the following statements are true except
A. The trust instrument requires that all the income must be distributed currently.
B. The trust instrument provides that amounts set aside for charitable purposes are deductible only to the trust.
C. The trust does not distribute amounts allocable to the corpus of the trust.
D. The exemption amount for a simple trust is $300.
Answer: B. The trust instrument provides that amounts set aside for charitable purposes are deductible only to the trust.
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Known liabilities of estimated amounts are
A. ignored. (Record them when paid.) B. reported on the balance sheet. C. reported on the income statement. D. reported only in the notes to the financial statements.
A small company that manufactures paper products might choose to use a geographic organization for its sales force because:
A. It wants to enjoy the benefits associated with division and specialization of labor B. It is a low-cost method of vertically organizing a sales force C. It is not concerned about the increased travel and expense time such an organization produces D. Each of its salespeople can specialize in a particular product line E. It is simple to implement