Ray Is Starting a New Business and Trying to Decide

question 130

Multiple Choice

Ray is starting a new business and trying to decide between a C corporation,S corporation and partnership.Which of the following statements regarding his decision is correct?

• A)An S corporation owner must pay income taxes only on the salary received.
• B)A partner in a partnership is taxed on his or her share of partnership income.
• C)A shareholder in a C corporation is taxed on his or her share of corporate income.
• D)S corporations pay taxes on their current year income.

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Definitions:

Error

A mistake in coding, logic, calculation, or the understanding of a system that leads to unexpected and usually undesirable outcomes.

Exponential Smoothing

Exponential smoothing is a time series forecasting method for univariate data that can be used to predict short-term trends by applying smoothing constants to past observations.

Actual Demand

The real observed demand for a product or service, as opposed to forecasted or estimated demand.

Alpha

In finance, a measure of the active return on an investment compared to a market index; in other contexts, it can signify a beginning or a primary factor.