Which of the Following Is True of an S Corporation

question 35

Multiple Choice

Which of the following is true of an S corporation?

• A) The corporation can have no more than 100 shareholders.
• B) Only foreign corporations with more than 10 shareholders can be an S corporation.
• C) They are taxed at the corporate level.
• D) The corporation must be a member of an affiliated group of corporations.

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Definitions:

Payback Period

The amount of time it takes for an investment to generate enough cash flow to recoup its original cost.

Net Cash Flow

The difference between a company's cash inflows and outflows within a specified period.

Time Value of Money

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.