Which of the Following Statements Regarding Foreign Persons Not Engaged

question 14

Multiple Choice

Which of the following statements regarding foreign persons not engaged in a U.S. trade or business is true?

• A) Foreign persons are subject to potential withholding taxes on the gross amount of U.S.-source investment income.
• B) Foreign persons with any U.S.-source income are taxed on net investment income (after expenses).
• C) Foreign persons are not subject to U.S. tax if not engaged in a U.S. trade or business.
• D) Foreign persons with only U.S.-source investment income are exempt from U.S. tax.

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Definitions:

Internal Controls

Systems and procedures implemented by a company to ensure the integrity of financial and accounting information.

Information Processing

The collection, manipulation, storage, retrieval, and classification of information.

Revenue Journal

An accounting ledger dedicated to recording sales transactions that generate revenue for a business.

Account

An accounting form that is used to record the increases and decreases in each financial statement item.