Which of the Following Is Not One of the Standards

question 53

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 must 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 100 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.

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Definitions:

Compound Interest

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

Simple Interest

Interest calculated on the principal portion of a loan or deposit, without compounding on the interest previously earned.

Original Principal

The initial amount of money borrowed or invested, before the addition of interest or profits.

Compounded Annually

A method of calculating interest where the interest rate is applied once per year to the principal, including any interest from previous periods.