Which of the Following Is True Regarding the Formation of Limited

question 27

Multiple Choice

Which of the following is true regarding the formation of limited liability companies?

• A) Professionals such as accountants, lawyers, and doctors may form limited liability companies.
• B) Professionals such as accountants, lawyers, and doctors may form limited liability companies, but must retain personal liability.
• C) Accountants may form limited liability companies, but no other professionals may do so.
• D) Certain professionals, such as accountants, lawyers, and doctors, cannot operate practices as limited liability companies
• E) Certain professionals, such as accountants, lawyers, and doctors, cannot operate practices as limited liability companies, unless each limited liability company is comprised of only three members.

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Definitions:

Compounded Monthly

A method of calculating interest where the earned interest is added to the principal at the end of each month, allowing the interest in the next month to be calculated on the new total.

Present Value

Today's value of a sum of money or sequence of cash flows set to be received in the future, calculated using a given rate of interest.

Compounded Monthly

This refers to the process where interest is added to the principal balance of a loan or deposit monthly, allowing the interest to then earn interest in subsequent periods.

Compounded Quarterly

The method of calculating interest where the interest is added to the principal amount four times a year.