Which Statement Is True

question 51

Multiple Choice

Which statement is true?

• A) LLCs cannot have earnings pass through as personal income.
• B) LLCs are ideal for joint ventures.
• C) S-type corporations can be partially owned by other corporations.
• D) LLCs can only be owned by people and not other corporations.

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Definitions:

Allowance for Doubtful Accounts

A method used in accounting to estimate the portion of accounts receivable that may not be collected.

Contra Asset

An account that is used to reduce the value of a related asset, such as accumulated depreciation reducing the book value of fixed assets.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, indicating the side which increases the account.

Allowance Method

A financial method that estimates the value of debts unlikely to be collected by determining uncollectible accounts each period's end.