Which of the Following Statements, If Any, Incorrectly Characterize the Check-The-Box

question 23

Multiple Choice

Which of the following statements, if any, incorrectly characterize the check-the-box Regulations?

• A)A one-owner business is a sole proprietorship if default (no election is made) occurs.
• B)A one-owner business can elect to be taxed as a corporation.
• C)If default (no election is made) occurs, a limited liability company is taxed as a partnership.
• D)The check-the-box Regulations can apply to entities that are already incorporated under state law.

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Definitions:

Statement of Stockholders' Equity

Financial documentation that shows changes in the value of a company's equity over a reporting period.

Retained Earnings

Retained earnings refer to the portion of a company's profits that are kept or retained within the company for reinvestment or to pay debt, rather than being paid out as dividends.

Dividend Declarations

Official announcements by a company's board of directors to pay dividends to shareholders, specifying the amount and the payment date.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.