Which of the Following Is Not a Suggestion a Tax

question 46

Multiple Choice

Which of the following is not a suggestion a tax accountant or lawyer might make concerning tax reduction?

• A)Place real estate in a separate corporation.
• B)Increase management's salaries and fringe benefits.
• C)Establish a leasing subsidiary.
• D)Give some or all of the owner's shares to heirs.

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Definitions:

Vertical Analysis

A financial statement analysis method where each entry for each of the three major categories (assets, liabilities, and equity) is represented as a proportion of the total.

Common Size Analysis

A financial analysis technique that converts each line of financial statement data to a percentage of a base amount.

Statement Of Retained Earnings

A financial statement that outlines the changes in retained earnings for a specified period.

Dividends Paid

The total cash distributed by a company to its shareholders as a share of the profits.