Which of the Following Is True of a Member-Managed LLC

question 51

Multiple Choice

Which of the following is true of a member-managed LLC?

• A) Each member has equal rights in the management of the business of the LLC.
• B) The member with the highest capital contribution becomes the de facto manager of the LLC.
• C) Any matter relating to the business of the LLC is decided by a unanimous vote of the members.
• D) Shareholders are not allowed to decide matters relating to the business of the LLC.

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Definitions:

Depreciation Expense

An accounting method of allocating the cost of a tangible or physical asset over its useful life to account for declines in value.

Half-Year Convention

The half-year convention is a method in depreciation accounting where an asset is assumed to have been in service for half the year, regardless of when it was actually acquired during the fiscal year.

Incremental Depreciation

The additional depreciation expense recorded when there is a change in the estimated useful life or salvage value of an asset.

Opportunity Costs

The cost of foregone alternatives, representing the benefits one could have received by taking an alternative action.