A C Corporation's Disadvantage Is Double Taxation

question 46

Multiple Choice

A C corporation's disadvantage is double taxation.This means that ______.

• A)the corporation is taxed on the profit it makes and the shareholders are taxed on the dividends
• B)the corporation pays taxes in April and October
• C)corporations are taxed more heavily than other corporate structures
• D)corporations pay taxes on the goods they purchase to create the product rather than on the profits from the sale of the goods

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Definitions:

Contract Price

The agreed-upon price for goods or services that is specified in a contractual agreement.

Critical Event

A significant occurrence that has a substantial impact on the operations or financial health of a business or market.

Measurability Conditions

Criteria required to recognize a financial transaction, including the ability to reliably measure the transaction's impact on the financial statements.

Percentage-Of-Completion Method

An accounting method used to recognize revenues and expenses of long-term contracts in proportion to the work completed.