Which of the Following Statements Is Incorrect

question 26

Multiple Choice

Which of the following statements is incorrect?

• A)S corporations must allocate income and expenses to their shareholders based on their proportionate ownership interest.
• B)The number of S corporation shareholders is unlimited.
• C)S corporation income is taxed to shareholders when earned.
• D)S corporation losses can offset shareholder income from other sources.

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Definitions:

Concentration Decrease

A reduction in the amount of a substance present in a specified volume of solution, typically resulting from dilution or chemical reaction.

Chemical Reaction

A process that involves rearrangement of the molecular or ionic structure of substances, resulting in the formation of new products.

Nitrogen Gas

A diatomic molecular gas (N2) that constitutes 78% of the Earth's atmosphere, colorless, odorless, and mostly inert.

Nitrogen Monoxide

A colorless gas with the formula NO; it is an important signaling molecule in the body and contributes to various biological processes.