Identify Which of the Following Statements Is True

question 78

Multiple Choice

Identify which of the following statements is true.

• A)Convertible debt issues might be considered "stock" for purposes of the S corporation single class of stock requirement.
• B)The S election must be made no later than the fifteenth day of the fourth month of the tax year for which the election is to be effective.
• C)A majority of shareholders must consent to the S corporation election.
• D)All of the above are false.

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Definitions:

Common Stock

Equity ownership in a corporation, with voting rights and the potential for dividends.

Retained Earnings

The part of net profits not allocated for dividend distribution but held back by the firm for the purposes of reinvesting in its main business or settling debts.

Dividends Paid

The portion of a company's earnings that is distributed to its shareholders as a payment, typically in the form of cash or additional shares.

Statement of Stockholders' Equity

A financial document that shows changes in the value of shareholders' equity in the company over a specific period.