Which of the Following Statements Is Correct

question 29

Multiple Choice

Which of the following statements is correct?

• A) Due to limited liability,unlimited lives,and ease of ownership transfer,the vast majority of U.S.businesses (in terms of number of businesses)are organized as corporations.
• B) Most businesses (by number and total dollar sales)are organized as proprietorships or partnerships because it is easier to set up and operate in one of these forms rather than as a corporation.However,if the business gets very large,it becomes advantageous to convert to a corporation,primarily because corporations have important tax advantages over proprietorships and partnerships.
• C) For a large company (taxable income over $1 million),the tax situation would,generally,favor organization as a partnership or proprietorship,or possibly as an S corporation,rather than as a regular corporation.However,legal considerations related to ownership transfers and liability offset the tax situation,with the result that most business (measured by dollar sales)is conducted by corporations.
• D) In the typical situation,a taxpayer's average tax rate is below his or her marginal rate.However,there is an income range within which the average rate exceeds the marginal rate.
• E) Statements c and d are both correct.

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Definitions:

National Origin

The country where a person was born, or more broadly, where their ancestors came from, often used in discussions of discrimination or diversity.

Citizenship

The status of being a member of a country with certain rights and responsibilities under the country's law.

Unjust Enrichment

A legal concept where one person benefits at another's expense without legal justification, necessitating restitution to the aggrieved party.

Employment-At-Will Rule

A legal doctrine stating that an employment relationship can be terminated by either the employer or the employee at any time, for any reason not prohibited by law, without prior notice.