Which of the Following Statements Regarding Voluntary Revocation of the S

question 72

Multiple Choice

Which of the following statements regarding voluntary revocation of the S election is incorrect?

• A)In order for the revocation to be effective retroactively to the first day of the tax year,the revocation must be filed by March 15 of the affected year.
• B)All of the shareholders must consent to the revocation.
• C)The corporation cannot reelect S corporation status for five years.
• D)The revocation can provide a specified effective date to occur mid-year,requiring two tax returns to be filed for the year.

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Definitions:

Predetermined Overhead Rate

The rate calculated before the period begins, used to allocate manufacturing overhead costs to individual units of production based on a consistent measure, such as direct labor hours.

Manufacturing Overhead

Indirect factory-related costs that are not directly tied to a specific product, such as maintenance and factory utilities.

Overapplied

In cost accounting, refers to a situation where the allocated amount of an indirect cost exceeds the actual incurred cost.

Underapplied

A situation where the allocated costs are less than the actual costs incurred, often in the context of manufacturing overhead.