Which of These Is Not Considered an Advantage of the Corporate

question 70

Multiple Choice

Which of these is not considered an advantage of the corporate business form?

• A) A shareholder employee's salary is fully deductible from corporate income
• B) Shareholders are not taxed on corporate income until it is distributed to them
• C) Shareholder-employees can participate in employee fringe benefits
• D) Corporate shareholders cannot deduct corporate losses from their income

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Definitions:

Financing Statement

A document filed to give public notice of a secured party’s interest in the debtor’s personal property, usually in connection with a secured transaction.

Bankruptcy

The legal status of a person or entity that cannot repay the debts they owe to creditors, leading to a legal process for resolution.

Sole Proprietorship

The simplest form of business organization, in which the owner is the business. The owner reports business income on his or her personal income tax return and is legally responsible for all debts and obligations incurred by the business.

Repayment Plan

An arrangement made to pay back a loan or debt in installments over a specified period.