Which of the Following Statements Regarding S Corporations Is True

question 18

Multiple Choice

Which of the following statements regarding S corporations is true?

• A) An S corporation may have no more than 50 shareholders.
• B) Any individual, estate, corporation, or trust may be an S corporation shareholder.
• C) An S corporation may have only one class of stock.
• D) An S corporation shareholder's allocable share of ordinary income is subject to self-employment tax.

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Definitions:

Walter Shewhart

A pioneering American physicist known for his work in statistical process control and creating the control chart method.

Control Chart

A statistical tool used to monitor, control, and improve the quality of processes by identifying any variations.

Horizontal Lines

Lines that run parallel to the horizon or ground level, often used in charts, graphs, and design to denote stability or a baseline.

Standard Error

An estimate of the standard deviation of the sampling distribution of a statistic, often used to measure the accuracy of sample means.