Which Transaction Affects the Other Adjustments Account on an S

question 23

Multiple Choice

Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2?

• A) Payroll penalty.
• B) Unreasonable compensation.
• C) Life insurance proceeds (nontaxable to the recipient S corporation).
• D) Taxable interest.

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Definitions:

Primary Circular Reactions

A concept in child development where an infant learns to reproduce an event that initially occurred by accident (e.g., sucking their thumb).

Centration

A cognitive limitation in early childhood, where a child focuses on one aspect of a situation while ignoring others.

Neural-Visual Network

A system in the brain that processes visual information, integrating it with neural signals for perception and understanding.

Numerical Understanding

The ability to comprehend, interpret, and work with numbers.