When a Corporation Is Thinly Capitalized, the IRS Is More

question 3

True/False

When a corporation is thinly capitalized, the IRS is more likely to reclassify a portion of the corporation's debt as equity.

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Definitions:

Supplies Expense

Costs associated with the consumable items that a business uses within its operating activities.

Cost Of Goods Sold

An accounting term for the direct costs attributable to the production of the goods sold by a company.

Inventory Items Sold

The total number of product units a company has sold to its customers during a specific period.

Materials Cost

The total expense incurred for the materials that are used in the production of goods or services.