Which of the Following Statements Is Incorrect About LLCs and the Check-The-Box

question 30

Multiple Choice

Which of the following statements is incorrect about LLCs and the check-the-box Regulations?

• A)If a limited liability company with more than one owner does not make an election, the entity is taxed as a corporation.
• B)All 50 states have passed laws that allow LLCs.
• C)An entity with more than one owner and formed as a corporation cannot elect to be taxed as a partnership.
• D)If a limited liability company with one owner does not make an election, the entity is taxed as a sole proprietorship.
• E)A limited liability company with one owner can elect to be taxed as a corporation.

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Definitions:

Balance Sheet

The financial statement of what is owned (assets), what is owed (liabilities), and the difference between the two (net worth) on a specific date.

Gross Profit

Revenue from sales or services minus the cost of goods sold, representing the preliminary profit figure before deducting operating expenses.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Net Sales

Total sales for the time period minus sales returned and adjustments made during the same time.