Which Is True of an S Corporation

question 28

Multiple Choice

Which is true of an S corporation?

• A)There can be no more than 50 shareholders.
• B)There can be only one class of stock.
• C)A majority of shareholders must agree the company should be an S corporation.
• D)All of these are correct.

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Definitions:

Tax Rate

The proportion of income or corporate profits charged by the government as tax.

Consolidated Balance Sheet

An aggregated financial statement that shows all assets, liabilities, and equity of a parent company and its subsidiaries.

Control Investment

An investment in which the buyer gains significant influence or control over the operations of the investee.

Acquisition Differential

The Acquisition Differential is the difference between the purchase price of a company and the fair value of its identifiable net assets at the time of acquisition.