Identify Which of the Following Statements Is True

question 62

Multiple Choice

Identify which of the following statements is true.

• A)Shareholders who acquire stock in an S corporation after the election date and prior to the election's effective date must consent to the election.
• B)S corporation consent by shareholders is binding on the current tax year and all future tax years.
• C)Only shareholders who own stock on the date an S election takes effect must consent to the election.
• D)All of the above are false.

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period of time, indicating efficiency in inventory management.

Projected Level

An estimate of future levels of a variable, such as sales or income, based on current trends and assumptions.

Increased Efficiency

Enhancements in productivity and performance, often achieved through improved processes or technologies, leading to reduced costs and increased outputs.

Cash Flow

The total amount of money being transferred into and out of a business, especially considered when assessing liquidity and financial stability.