Which of the Following Statements Is Not True of an S-Corporation

question 10

Multiple Choice

Which of the following statements is not true of an S-corporation?

• A)It may have no more than 100 shareholders.
• B)Shareholders must be U.S. citizens or residents.
• C)Profits and losses must be allocated in proportion to shareholder interests.
• D)Partnerships may be shareholders.
• E)Shareholders may not deduct losses in an amount greater than their original investment.

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Definitions:

Marginal Product

Marginal product refers to the increase in output that results from employing one more unit of a particular input while keeping other inputs constant.

Power Cords

Electrical cables that connect an appliance, device, or equipment to the main electricity supply.

Third Worker

Refers to an additional laborer in a scenario, typically discussed in the context of marginal productivity or the law of diminishing returns.

Profit-Maximizing Quantity

The level of production at which a firm achieves the highest possible profit.