Actual Dividends Paid to Shareholders Result in Double Taxation

question 33

True/False

Actual dividends paid to shareholders result in double taxation. Likewise, deemed dividends (e.g., free use of corporate assets by a shareholder) result in double taxation.

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Definitions:

Current Accounting Standards

The latest guidelines and principles established by regulatory bodies for the preparation and presentation of financial statements.

Smoothing

An accounting practice where companies level out peaks and troughs in their financial statements over time to present a more consistent financial performance.

Pension Expense

The total cost incurred by an employer to provide pension benefits to its employees, recognized during the period the employees provide services.

Amortization

The gradual reduction of a debt over a period through regular payments covering interest and principal components.