Which of the Following Statements Regarding Alternative Business Forms Is

question 53

Multiple Choice

Which of the following statements regarding alternative business forms is true?

• A) If an S corporation's election terminates, the corporation is forced to liquidate.
• B) Some states treat S corporations as taxable corporations for purposes of corporate franchise taxes.
• C) Generally, the transfer of property to a new partnership in exchange for a partnership interest is a taxable event.
• D) The owners of a new business should be indifferent between operating as an S corporation and a partnership.

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Definitions:

Total Revenue

Total Revenue is the entire amount of money earned by a firm from the sale of its goods or services before any costs or expenses are deducted.

Purely Competitive Firm

A business that operates in a market where there are many sellers and buyers, the product is homogeneous, and there is free entry and exit from the market.

Units of Output

The quantity of goods or services produced by a company, industry, or economy within a specific period.

Marginal Revenues

The extra earnings accrued by selling an additional unit of a good or service.