Which of the Following Statements Regarding the Tax Burden Imposed

question 23

Multiple Choice

Which of the following statements regarding the tax burden imposed on business entities is true?

• A)The tax burden imposed on corporate earnings is always lower if the corporation makes an S election.
• B)Business owners desiring current cash flow can maximize annual after-tax cash flow by operating as a regular corporation.
• C)Current tax cost associated with shareholder cash flow received as dividends may be lower than cash flow received as payments of salary,interest,or rental income.
• D)All of the above statements are true.

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Definitions:

Specified Criteria

Pre-determined standards or conditions that must be met or complied with.

Departmental Contribution

The amount of revenue contributed by a specific department after deducting its direct and indirect costs.

Overhead

Refers to the indirect costs required to operate a business, such as rent, utilities, and administrative expenses, not directly tied to the production process.