Identify Which of the Following Statements Is True

question 8

Multiple Choice

Identify which of the following statements is true.

• A)The personal holding company tax is levied to prevent closely held corporations from sheltering passive income.
• B)Caleb Corporation is owned by a mother and her two daughters. It reports $100,000 of rental income; $30,000 of depreciation, interest, and property taxes on the rental real estate; and $10,000 of dividend income. Caleb Corporation is classified as a personal holding company.
• C)Luke Corporation is owned by a father and his son. The corporation employs 10 individuals to provide public accounting services. Father and son make all of the work assignments for the professional employees. The professional fees earned by the corporation are personal holding company income.
• D)All of the above are false.

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Definitions:

Positive Reinforcements

The introduction of rewarding stimuli following a desired behavior to increase the likelihood of it being repeated.

Punishment

A consequence designed to reduce the occurrence of unwanted behavior by either applying a negative stimulus or removing a positive one.

Oral Reprimand

is a verbal expression of criticism or disapproval, usually from a person in authority.

Organizations

Entities comprising multiple people, such as businesses or charities, that work towards a common goal through structured coordination.