Which of the Following Is Unique for an S Corporation

question 36

Multiple Choice

Which of the following is unique for an S corporation?

• A) The profits and losses of an S corporation are not taxed at the corporate level, but shareholders must include these profits and losses on their individual tax returns.
• B) The shareholders of an S corporation must include the firm's profit and losses in their individual income taxes even if no money is distributed to them.
• C) There is a maximum limit on the number of shareholders for an S corporation.
• D) None of the above statements is unique.

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Definitions:

Standard Direct Materials

The predetermined cost and quantity of materials required for the production of goods, used in budgeting and costing.

Direct Materials

Raw materials that can be directly identified and easily traced to the manufacturing of a final product.

Standard Materials Price

The predetermined cost per unit of material that is used for budgeting and cost control purposes in manufacturing.

Direct Materials

Raw materials that are directly incorporated into a finished product and are a significant part of the manufacturing process.