Which of the Following Statements Is Incorrect About LLCs and the Check-The-Box

question 30

Multiple Choice

Which of the following statements is incorrect about LLCs and the check-the-box Regulations?

• A)If a limited liability company with more than one owner does not make an election, the entity is taxed as a corporation.
• B)All 50 states have passed laws that allow LLCs.
• C)An entity with more than one owner and formed as a corporation cannot elect to be taxed as a partnership.
• D)If a limited liability company with one owner does not make an election, the entity is taxed as a sole proprietorship.
• E)A limited liability company with one owner can elect to be taxed as a corporation.

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Definitions:

Cash Flow Statement

A financial report summarizing the total cash income from a company's operational activities and external funding, along with the expenditure on business operations and investments within a specific timeframe.

Operating Activities

Activities that relate to the core business operations of a company, including revenue and expense transactions.

Direct Method

A cash flow statement preparation approach that lists major classes of gross cash receipts and payments.

Gain

A financial term referring to the positive difference between the sale price of an asset and its original purchase price.