Which of the Following Statements About S Corporations Is Most

question 236

Multiple Choice

Which of the following statements about S corporations is most accurate?

• A) The major attraction of S corporations is that they avoid the problem of double taxation.
• B) S Corporations are similar to C corporations, except that the majority of owners are foreign investors.
• C) Any corporation willing to pay the necessary fees and fill out the required paperwork can become an S Corporation.
• D) Only large corporations with operations in more than one state can qualify to be classified as S corporations.

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Definitions:

Reduces

Reduces refers to the act of making something lesser in size, amount, or degree.

Present Value

The actual value now of future money amounts or cash inflows based on a defined rate of yield.

Earnings Rate

The rate at which a company or investment generates income, usually expressed as a percentage of the investment or the company's capital.

Compound Interest

Interest on a deposit or loan that is calculated based on the initial amount along with the total of all interest accumulated in earlier periods.