Which Transaction Affects the Other Adjustments Account on an S

question 138

Multiple Choice

Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2?

• A)Charitable contributions.
• B)Unreasonable compensation.
• C)Payroll tax penalty assessed.
• D)Domestic production activities deduction.
• E)None of the above.

---

Definitions:

Competitive Industry

An industry characterized by many firms producing similar goods or services, where no single firm has a dominant market share.

Market Price

The existing rate at which an asset or service is available for buying or selling in the market.

Demand Curve

A visual diagram showing the correlation between an item's price and the amount of it that consumers want to buy.

Profit Maximized

Profit maximized refers to a scenario where a firm achieves the highest possible profit from its operations, where marginal costs equal marginal revenue.