Which of the Following Is an Example of the Income-Shifting

question 95

Multiple Choice

Which of the following is an example of the income-shifting strategy?

• A)A corporation paying its shareholders a $20,000 dividend.
• B)A corporation paying its owner a $20,000 salary.
• C)A high tax rate taxpayer investing in tax-exempt municipal bonds.
• 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:

Work In Process

Goods and materials that are partially completed in the manufacturing process, representing an inventory category on the balance sheet.

Inventory

Raw materials, work-in-progress, and finished goods that are considered part of a business's assets that are ready or will be ready for sale.

Non-Value-Added Costs

Expenses that do not contribute to the value or appeal of a product or service from the perspective of the customer.

Schedule Of Activity

A detailed plan that outlines all the tasks, timings, and responsibilities involved in a project or process to ensure successful completion and management.