Ray Is Starting a New Business and Trying to Decide

question 1397

Multiple Choice

Ray is starting a new business and trying to decide between a C corporation, S corporation, and partnership. Which of the following statements regarding his decision is correct?

• A) S corporations pay taxes on their current year income.
• B) A partner in a partnership is taxed on his or her share of partnership income.
• C) A shareholder in a C corporation is taxed on his or her share of corporate income.
• D) An S corporation owner must pay income taxes only on the salary received.

---

Definitions:

Binging and Purging

A pattern of eating behavior where excessive food consumption is followed by inappropriate methods to avoid weight gain, often seen in eating disorders.

Eating Disorder

Mental disorders characterized by abnormal or disturbed eating habits that negatively affect a person’s physical or mental health, such as anorexia nervosa, bulimia nervosa, and binge-eating disorder.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification and diagnostic tool used in psychiatry and psychology.

Pathological Gambling

A disorder characterized by an uncontrollable urge to gamble, leading to severe personal and social consequences.