Mr Chan Has Created a Holding Company Between Himself and His

question 8

Multiple Choice

Mr. Chan has created a holding company between himself and his corporation (which earns only active business income) . This will permit which of the following?

• A)Mr. Chan will receive dividends from the corporation, free of tax.
• B)The corporation's income will not be taxed.
• C)The holding company will receive dividends from the corporation, free of tax.
• D)Mr. Chan will receive dividends from the holding company, free of tax.

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Definitions:

Petty Cash Fund

A small amount of cash kept on hand for minor or unexpected expenses.

Replenish

To fill something up again, restoring its level or supply to a former state.

Journal Entry

The recording of financial transactions into the accounting records of a business, typically involving a debit to one account and a credit to another.

Petty Cash Fund

A small amount of cash kept on hand for minor, everyday business expenses.