Which of the Following Statements Regarding S Corporations Is True

question 58

Multiple Choice

Which of the following statements regarding S corporations is true?

• A) If an S corporation's election terminates, the corporation is forced to liquidate.
• B) All states treat the S corporation as a taxable corporation for corporate franchise tax purposes.
• C) Generally, the transfer of property by a controlling shareholder to a newly-formed S corporation in exchange for stock is a nontaxable event.
• D) The owners of a new business should be indifferent between operating as an S corporation and a partnership.

Identify what constitutes cash and cash equivalents.

Recognize the direct and indirect methods of reporting cash flows from operating activities.

Comprehend the process of converting accrual basis income to cash basis.

Know the major sources of cash inflows and outflows reported in the statement of cash flows.

---

Definitions:

Unsought Products

Goods or services that consumers do not typically shop for until a need arises, often requiring significant marketing effort to sell.

Symbolic Characteristics

Features or aspects of objects, actions, or events that represent particular meanings or values beyond their literal sense.

Service

In economics and business, services refer to intangible products that are produced and consumed simultaneously, offering value such as entertainment, advice, access, or a temporary benefit.

Physical

Refers to material objects, things that occupy space and can be perceived by the senses.