Which of the Following Is an Example of the Timing

question 2

Multiple Choice

Which of the following is an example of the timing strategy?

• A)A corporation paying its shareholders a $20,000 dividend.
• B)A parent employing her child in the family business.
• C)A taxpayer gifting stock to his children.
• D)A cash-basis business delaying billing its customers until after year-end.
• E)None of the choices are correct.

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Definitions:

Preferred Stockholders

Investors who own shares of preferred stock in a company, typically entitled to dividends before common stockholders and having priority in assets upon liquidation.

Board Of Directors

A group of individuals elected by shareholders to oversee and make strategic decisions for a corporation.

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Contra Account

An account used in accounting to reduce the value of a related account when the two are netted together, providing a clearer picture of financial status.