Which of the Following Statements Is NOT True

question 36

Multiple Choice

Which of the following statements is NOT true?

• A) The traditional form of the corporation is called a C-Corporation (C-Corp)
• B) The income and losses of S-corporation (S-Corps) pass through to the tax returns of its owners and are then taxed at the individual rates
• C) A benefit corporation (benefit corp) is a tax exempt nonprofit corporation
• D) A Limited Liability Company (LLC) can choose whether to be taxed as a partnership or as a corporation

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Definitions:

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of a unit of product.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding production costs but including items like rent, utilities, and payroll.

Net Income

The total profit of a company after all expenses, including taxes, cost of goods sold, and operating expenses, have been deducted from total revenue.

Variable Costing

Another perspective: A costing methodology that treats only those costs that vary with production level as product costs, emphasizing the impact of fixed costs on profitability.