All of the Following Statements Are True Except

question 42

Multiple Choice

All of the following statements are true except

• A)the net income earned by a sole proprietorship is reported on the owner's individual income tax return.
• B)the net income of an S corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the S corporation to individual shareholders are also taxed.
• C)the net income of C corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the C corporation to individual shareholders is also taxed.
• D)LLCs are generally taxed as partnerships.

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Definitions:

Return On Common Stockholders' Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders equity, indicating the profitability from the shareholders' perspective.

Debt To Assets Ratio

Measures the percentage of assets provided by creditors; computed by dividing total liabilities by total assets.

Total Assets

The combined value of everything a company owns, including cash, property, equipment, and inventory.

Total Debt

The sum of all liabilities, both current and long-term, that a company owes to creditors.