Identify Which of the Following Statements Is True

question 1

Multiple Choice

Identify which of the following statements is true.

• A) Convertible debt issues might be considered "stock" for purposes of the S corporation single class of stock requirement.
• B) A majority of shareholders must consent to the S corporation election.
• C) The S election must be made no later than the fifteenth day of the fourth month of the tax year for which the election is to be effective.
• D) All of the above are false.

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Definitions:

Break-even Sales

The amount of revenue needed to be generated to cover all fixed and variable costs, indicating no profit or loss.

Wholesale Division

A division of a company that sells goods in large quantities to retailers, other distributors, or sometimes directly to consumers.

Fixed Expenses

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Break-even Sales

The amount of revenue needed to cover both fixed and variable costs, resulting in neither profit nor loss.