Benefits to Incorporating a Small Business with One Owner Include

question 24

Multiple Choice

Benefits to incorporating a small business with one owner include all of the following EXCEPT

• A) the ability to raise capital through public offerings.
• B) the small business tax credit on income below $200,000.
• C) the ability to limit liability to the amount invested in the company.
• D) the $500,000 capital gains exemption for qualified small business shares.

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Definitions:

Overapplied Overhead

A credit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost applied to Work in Process exceeds the amount of overhead cost actually incurred during a period.

Underapplied Overhead

A debit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost actually incurred exceeds the amount of overhead cost applied to Work in Process during a period.

Adjusted Cost

The net cost of an asset after adjusting for changes such as improvements or depreciation.

Cost of Goods Available

The total cost of inventory that a company has at its disposal for sale during a certain period, comprising both the beginning inventory and the cost of goods manufactured.