Identify Which of the Following Statements Is True

question 60

Multiple Choice

Identify which of the following statements is true.

• A)An S corporation should have a buy-sell agreement to guard itself against an ill-advised sale of its stock.
• B)The terms "small business corporation" and "S corporation" are synonymous.
• C)A regular corporation has common and preferred stock outstanding on January 1. On January 2, the preferred stock is canceled in a recapitalization, leaving only common stock outstanding. The corporation can make an S election for this tax year.
• D)All of the above are false.

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Definitions:

Thyroid Cartilage

The largest cartilage of the larynx, commonly known as the Adam's apple, playing a key role in protecting the vocal cords and the entrance to the trachea.

Cricoid Cartilage

A ring-shaped cartilage located at the base of the larynx (voice box), fundamental for speech.

Tracheotomy

A surgical procedure in which an opening is created in the neck's trachea to provide an airway or remove secretions from the lungs.

Windpipe

Another term for the trachea, a large tube that carries air down to the lungs from the throat.