Identify Which of the Following Statements Is True

question 22

Multiple Choice

Identify which of the following statements is true.

• A) All corporations are exempt from the accumulated earnings tax on their first $250,000 of accumulated earnings.
• B) A health service corporation can claim an accumulated earnings credit of $250,000.
• C) Payment of deficiency dividends will prevent the imposition of the accumulated earnings tax.
• D) All of the above are false.

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Definitions:

Single Employee

Refers to an individual worker within an organization, focusing on aspects related to their employment status or conditions.

Compensating Balance

A minimum cash balance required by some banks to be maintained in a bank account.

Maximum Cash Balance

The highest amount of cash that a company aims to hold at any given time.

Internal Control

Protocols and processes designed by a business to secure the authenticity of its financial and accounting information, enhance accountability, and impede fraudulent operations.