Which of the Following Statements Is Correct

question 41

Multiple Choice

Which of the following statements is correct?

• A)An owner of a C corporation is taxed on his or her proportionate share of earnings.
• B)S shareholders are only taxed on distributions.
• C)S shareholders are taxed on their proportionate share of earnings that are distributed.
• D)S shareholders are taxed on their proportionate share of earnings whether or not distributed.

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Definitions:

Merchandise Inventory

Goods a company holds for the purpose of sale to customers.

Unearned Rent

Unearned Rent is a liability representing rent payments received in advance for which the services have yet to be rendered or the occupancy period has not yet occurred.

Rental Income

Revenue received from leasing property or other assets to tenants.

Advance

A payment made before it is due or for goods and services yet to be received.