Which of the Following Statements Is TRUE

question 28

Multiple Choice

Which of the following statements is TRUE?

• A) Working capital and fixed costs act like a variable cost
• B) Working capital and fixed assets act like a fixed cost
• C) Working capital acts like a variable cost; fixed assets act like a fixed cost
• D) Working capital acts like a fixed cost; fixed assets act like a variable cost

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Definitions:

S Corporation

A special type of corporation in the United States that meets specific Internal Revenue Service criteria and elects to be taxed as a pass-through entity, avoiding double taxation on corporate income.

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership and a stake in the company's profits and decision-making.

Limited Partnership

A business partnership where at least one partner has unlimited liability and one or more partners have limited liability, only responsible for the money they have invested.

Legal Entity

An organization or structure that is recognized by law as having rights and responsibilities, such as a corporation, partnership, or trust.