The Interest and Dividends Paid by a Corporation Are Considered

question 54

True/False

The interest and dividends paid by a corporation are considered to be deductible operating expenses, hence they decrease the firm's tax liability.

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Definitions:

Drawer

The party in a transaction that issues or writes a check or draft, instructing their bank to pay a specified sum to a certain beneficiary.

Notice Of Dishonor

A formal notification that a negotiable instrument, like a check, has been refused payment and is dishonored.

Collecting Bank

A bank that processes checks and other instruments for payment on behalf of the payee.

Secondarily Liable

Being indirectly responsible for a debt or obligation, where primary liability falls to another party.