Which One of the Following Statements Is True

question 21

Multiple Choice

Which one of the following statements is true?

• A)The two primary sources of financing available to corporations are borrowed funds and funds invested by owners.
• B)Financing activities involve the acquisition of property,plant and equipment.
• C)Borrowed funds are a more permanent source of financing than funds invested by owners.
• D)Investing activities involve the selling of products or services and the incurring of expenses related to selling these products and services.

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Definitions:

Tax Shelters

Tax Shelters are investment options or financial strategies used to minimize or avoid taxes, taking advantage of legal provisions to reduce tax liabilities.

Roth Retirement Plan

A retirement savings plan allowing a person to contribute after-tax income, with withdrawals being tax-free under certain conditions.

Tax Withdrawals

Payments or deductions from earnings or income which are removed by the government as taxation.

Income Tax Code

The body of laws and regulations that govern how individuals, corporations, and other entities are taxed on their income.