If Annie and Andy (Each a 30 Percent Shareholder in a Calendar-Year

question 83

Multiple Choice

If Annie and Andy (each a 30 percent shareholder in a calendar-year S corporation) file a revocation statement on February 10, 2019, to terminate their S corporation's S election, what is the effective date of the S corporation termination (assuming they do not specify one) ?

• A)January 1, 2019.
• B)February 10, 2019.
• C)January 1, 2020.
• D)February 10, 2020.
• E)None of the choices are correct.

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Definitions:

Average Sale Period

estimates the average time it takes for a company to sell its inventory.

Accounts Receivable Turnover

A financial metric that measures how often a company collects its receivables over a time period.

Inventory Turnover

A ratio indicating how many times a company's inventory is sold and replaced over a specific period, helping assess efficiency in managing inventory levels.

Accounts Receivable Turnover Ratio

A financial metric indicating how effectively a company extends credit and collects debts on that credit; calculated by dividing net credit sales by average accounts receivable.