Which of the Following Characteristics Can Disqualify a Corporation from S

question 120

Multiple Choice

Which of the following characteristics can disqualify a corporation from S Corporation status?

• A)A corporation has nonresident aliens as shareholders.
• B)One of the corporation's shareholders is a qualifying trust.
• C)A corporation has 101 shareholders including a husband and wife.
• D)A corporation has voting and nonvoting stock, but both types of stock confer identical rights to distribution and liquidation proceeds.

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Definitions:

AQL

Acceptable Quality Level, a statistical measurement used in quality control that defines the maximum number of defective items allowed in a sample lot.

Type II Error

Statistically, the probability of accepting a bad lot.

Bad Lot

A batch of products that fails to meet quality specifications or standards, often leading to rejection or rework.

LTPD

The Lot Tolerance Percent Defective, which refers to the maximum acceptable defect rate in a sample lot for the lot to be accepted.