Identify Which of the Following Statements Is True

question 60

Multiple Choice

Identify which of the following statements is true.

• A)An S corporation should have a buy-sell agreement to guard itself against an ill-advised sale of its stock.
• B)The terms "small business corporation" and "S corporation" are synonymous.
• C)A regular corporation has common and preferred stock outstanding on January 1. On January 2, the preferred stock is canceled in a recapitalization, leaving only common stock outstanding. The corporation can make an S election for this tax year.
• D)All of the above are false.

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Definitions:

Pretrial Negotiations

discussions and agreements made between the parties involved in a legal case with the aim to resolve the matter before it goes to trial.

Out-Of-Court Settlement

An agreement reached between parties in a dispute without the need for a court trial, often involving negotiation or mediation.

Lawsuits

Legal actions brought in court by one party against another seeking redress or enforcement of rights.

Costly

Involving high expenses; something that requires a significant amount of money to purchase or maintain.