Owners of Which of the Following Entity Types Could Potentially

question 72

Multiple Choice

Owners of which of the following entity types could potentially increase their after-tax cash flow from the entity by reducing the compensation they receive in order to increase the amount of business income that flows-through to them from the entity?

• A) Sole-proprietorship.
• B) Entity taxed as a partnership.
• C) S corporation.
• D) "Entity taxed as a partnership" and "S corporation".

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Definitions:

Comparative Negligence

A legal doctrine that reduces the plaintiff's damages award by the percentage of their fault in causing the injury.

Strict Liability

Strict Liability is a legal principle that holds an individual or entity responsible for damages or harm caused by their actions, irrespective of negligence or intent.

Contributory Negligence

is a defensive legal strategy used to claim that an injured party cannot recover damages if it is demonstrated that they were also at fault, even partially, for their own injury.

Warranty of Merchantability

An implicit guarantee that a product is fit for the general purpose for which it is sold and meets a minimum quality standard.