Which of the Following Statements About Corporations Is True

question 37

Multiple Choice

Which of the following statements about corporations is true?

• A) Corporations must distribute profits at the end of each year.
• B) Corporate tax rates are always higher than individual tax rates.
• C) Corporations utilize pass-through taxation.
• D) Corporations can deduct certain business expenses that other forms of business can't, which could lower the amount of money subject to taxes.

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Definitions:

Independent Contractor

An individual or business that provides goods or services to another entity under terms specified in a contract, not considered an employee for tax and legal purposes.

Liability

A financial obligation or responsibility, often legal in nature, that an entity or individual has to another.

Agent

An individual authorized to act on behalf of another party, known as the principal, in dealings with third parties.

Doctrine Of Respondeat Superior

This legal principle holds an employer or principal legally responsible for the wrongful acts of an employee or agent, performed within the scope of employment or agency.