Which Statement Is Incorrect with Respect to an S Shareholder's

question 24

Multiple Choice

Which statement is incorrect with respect to an S shareholder's consent?

• A) An S election requires a consent from all of the S corporation's shareholders.
• B) Both husband and wife must consent if one owns the stock as community property.
• C) A consent extension is available only if Form 2553 is filed on a timely basis, reasonable cause is given, and the interests of the government are not jeopardized.
• D) A consent must be in writing.
• E) None of the above statements is incorrect.

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Definitions:

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership stake of the owners.

Revenues

The total income generated from normal business operations and other activities over a specific time period.

Expenses

The costs incurred in the process of generating revenue, including operational, administrative, and sales costs.

Debits

In accounting, an entry made on the left side of an account, increasing asset or expense accounts, or decreasing liability, equity, or revenue accounts.