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:

Activity

Refers to any action or task performed within an organization that consumes resources.

Relevant Range

The range of activity over which a company expects its operating assumptions, such as cost behavior and sales mix, to remain valid, influencing budgeting and financial planning.

Fixed Costs

Costs that do not vary with the level of production or business activity, remaining constant even when output changes.

Variable Cost

Expenses that change in proportion to the activity or volume of business.