Which of the Following Is Not One of the Standards

question 68

Multiple Choice

Which of the following is not one of the standards that a business must meet to qualify for status as a subchapter S corporation?

• A) The business cannot be a subsidiary of another corporation.
• B) All shareholders must agree to have the corporation formed as a subchapter S corporation.
• C) It can have no more than 75 members (husbands and wives count as one member).
• D) It can have only one class of stock issued and outstanding.
• E) The shareholders must be U.S. citizens.

---

Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal.

Credit Column

In accounting, the column in ledgers or financial statements where credits are recorded, typically indicating a decrease in assets or an increase in liabilities.

Liabilities

Financial obligations or debts a company owes to others, such as loans, accounts payable, and mortgages.

Assets

Resources owned by a company that have economic value and are expected to provide future benefits.