Which of the Following Statements Is Not True

question 41

Multiple Choice

Which of the following statements is not true?

• A)A corporation is generally allowed to choose either a calendar year or fiscal year for its reporting period.
• B)A personal service corporation must use a fiscal year unless it can satisfy IRS requirements that there is a business purpose for a calendar year.
• C)S corporations must generally use a calendar year.
• D)Because corporations are "persons" only in the legal sense of the word, they are not entitled to the earned income credit.
• E)None; all are true.

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Definitions:

Net Cash Flow

The total amount of money being transferred into and out of a business, specifically the sum of cash receipts minus cash payments over a given period of time.

Maximum Cost

The highest possible expense that can be incurred for a specific activity, project, or purchase.

Method

A systematic way of accomplishing something. In a financial context, this could refer to a specific approach or procedure adopted for accounting or analysis purposes.

Average Rate of Return Method

A method of evaluating capital investments by calculating the average annual profit expected from the investment and dividing it by the initial investment cost.