Identify Which of the Following Statements Is True

question 22

Multiple Choice

Identify which of the following statements is true.

• A) Section 444 permits an S corporation to elect to use a fiscal year other than a permitted year.
• B) The natural business year for fiscal- year election purposes is any tax year that ends within six months after the peak period of business.
• C) A new corporation that is 100% owned by Johnny Blake, a cash method of accounting taxpayer, makes an S election for its initial tax year. The S corporation must also elect to use the cash method of accounting as its overall accounting method.
• D) All of the above are false.

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Definitions:

Production Facility

A site or plant where goods are produced or manufactured, equipped with specialized equipment for production activities.

Idle Capacity

Unused production capability, where available resources such as machinery or labor are not fully utilized.

Financial Advantage

Refers to the benefit gained in financial terms, which could be through cost savings, revenue increase, or any other financial gain.

Special Discounted Price

A lower than the usual price offered on goods or services, typically for promotional purposes or to specific customer groups.