Regarding Debt, S Corporation Shareholders Are Deemed at Risk Only

question 156

True/False

Regarding debt, S corporation shareholders are deemed at risk only for direct loans they make to their S corporation.

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Definitions:

Cash Collection

The process of receiving and processing payments from customers, typically impacting the business’s liquidity.

Unearned Revenues

Income received by an individual or company for a service or product that has yet to be provided or delivered.

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of assets, provision of services, or other means.

Net Income

The total earnings of a company after deducting all expenses and taxes from total revenue.