Which of the Following Statements Is CORRECT

question 108

Multiple Choice

Which of the following statements is CORRECT?

• A)The income of certain small corporations that qualify under the Tax Code is completely exempt from corporate income taxes. Thus, the federal government receives no tax revenue from these businesses, even though they report high accounting profits.
• B)All businesses, regardless of their legal form of organization, are taxed under the Business Tax Provisions of the Internal Revenue Code.
• C)Small corporations that qualify under the Tax Code can elect not to pay corporate taxes, but then each stockholder must report his or her pro rata shares of the firm's income as personal income and pay taxes on that income.
• D)Congress recently changed the tax laws to make dividend income received by individuals exempt from income taxes. Prior to the enactment of that law, corporate income was subject to double taxation, where the firm was first taxed on the corporation's income and stockholders were taxed again on this income when it was paid to them as dividends.
• E)All corporations other than non-profits are subject to corporate income taxes, which are 15% for the lowest amounts of income and 38% for the highest income amounts.

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Definitions:

Total Cash

The overall amount of liquid assets available to an individual or organization.

Price/demand Elasticity

A measure of how much the demand for a product changes in response to a change in its price.

Continuous Values

Numerical data that can take any value within a specified range, often associated with measurements.

Production Cost

The total expense incurred in the manufacturing of a product or providing a service, including raw materials, labor, and overhead costs.