Distributions by a Corporation to Its Shareholders Are Presumed to Be

question 16

True/False

Distributions by a corporation to its shareholders are presumed to be a return of capital unless the parties can prove otherwise.

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Definitions:

Liquid Investments

Liquid investments are assets that can be quickly and easily converted into cash without significant loss of value.

Aggressive Collection

A technique used by businesses to rapidly pursue the collection of outstanding receivables to improve cash flow and reduce delinquencies.

ACP (Average Collection Period)

The average number of days it takes for a business to receive payments owed by its clients, reflecting the effectiveness of a company's credit and collection policies.

Credit Terms

The conditions, including payment deadlines and interest rates, that a seller extends to a buyer.