A C Corporation's Disadvantage Is Double Taxation

question 46

Multiple Choice

A C corporation's disadvantage is double taxation.This means that ______.

• A)the corporation is taxed on the profit it makes and the shareholders are taxed on the dividends
• B)the corporation pays taxes in April and October
• C)corporations are taxed more heavily than other corporate structures
• D)corporations pay taxes on the goods they purchase to create the product rather than on the profits from the sale of the goods

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Definitions:

Manufacturing Costs

Refers to the total expenses incurred in the process of producing a product, including raw materials, labor, and overhead costs.

Variable Costing

An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, treating fixed costs as period expenses.

Absorption Costing

An accounting method that includes all manufacturing costs (direct costs, fixed, and variable overheads) in the cost of a product.

Costing Approach

A method or system used to calculate the cost of a product, project, or service for accounting, financial, and strategic planning.