Hudson and Elsa Want to Market a New Line of Kayaks

question 49

Multiple Choice

Hudson and Elsa want to market a new line of kayaks and related gear under the brand name Journeys as a corporation-Journeys Inc. To avoid income taxes at the corporate level,they should form

• A)an alien corporation.
• B)a close corporation.
• C)an S corporation.
• D)a private corporation.

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Definitions:

Credit Side

The right side of an accounting ledger where increases in liabilities, equity, and revenues or decreases in assets and expenses are recorded.

T Account

A graphical representation used in accounting to show the effect of transactions on individual accounts, displaying debits on the left and credits on the right.

Debts

Money owed by an entity to another party, required to be paid back, typically with interest.

Liabilities

Financial obligations or debts that a business owes to others, which must be settled over time through the transfer of economic benefits.