Which of the Following Statements Is Incorrect

question 129

Multiple Choice

Which of the following statements is incorrect?

• A) The number of owners of an LLC is not limited.
• B) If the LLC has three or more corporate characteristics, it will be taxed as a C corporation.
• C) An LLC can elect to be taxed as a C corporation or as a partnership.
• D) Only a. and c.
• E) a., b., and c. are incorrect.

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Definitions:

Owner's Equity

The amount of assets owned by the business proprietor after all liabilities have been deducted.

Business Profits

The financial surplus generated from conducting business activities after all expenses have been subtracted from revenue.

Business Losses

Financial losses incurred by a business, often resulting from expenses exceeding revenues within a specific time period.

Permanent Account

An account in the general ledger that carries its ending balance over to the next accounting period.