Identify Which of the Following Statements Is True

question 4

Multiple Choice

Identify which of the following statements is true.

• A)A corporation accumulates earnings to fund the redemption of a shareholder's stock following her death so as to provide her estate with liquidity to pay death taxes. Such an accumulation of earnings is a reasonable business need.
• B)A corporation accumulates earnings to fund a buy-sell agreement. Such an accumulation of earnings is a reasonable business need.
• C)A corporation's net capital gain (minus any federal income taxes paid with respect to such gain)increases the tax base for the accumulated earnings tax.
• D)All of the above are false.

---

Definitions:

CBC News

A division of the Canadian Broadcasting Corporation responsible for the news broadcasting.

Perfect Attendance

The achievement of being present at every required instance over a set period of time, often used in educational and work contexts.

Incentive Program

A strategy used by organizations to motivate and reward employees to exceed standard expectations.

P-value

A measure used in hypothesis testing to determine the strength of the evidence in support of a null hypothesis.