Which of the Following Statements Is CORRECT

question 38

Multiple Choice

Which of the following statements is CORRECT?

• A) One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.
• B) It is generally easier to transfer one's ownership interest in a
• Partnership than in a corporation.
• C) One of the advantages of the corporate form of organization is that
• It avoids double taxation.
• D) One of the advantages of a corporation from a social standpoint is that every stockholder has equal voting rights, i.e., "one person,
• One vote."
• E) Corporations of all types are subject to the corporate income tax.

---

Definitions:

New Stock

New stock refers to shares that a company issues to the public for the first time, typically through an initial public offering (IPO) to raise capital.

Earnings After Tax

The net income a company retains after deducting all its expenses, including taxes, highlighting its profitability.

Deferred Taxes

Taxes owed that are not paid at the current time but are instead deferred to be paid in the future.

Net Cash Flow

The variation in cash earnings versus expenditures for a business during a certain period.