When Looking at NAICS Codes

question 169

Multiple Choice

When looking at NAICS codes:

• A) The fewer numbers in the code, the more general the industry classification is.
• B) The more numbers in the code, the more general the industry classification is.
• C) The fewer numbers in the code, the more specific the industry classification is.
• D) The United States is the only country to collect data that groups firms in similar lines of business.
• E) None of these alternatives is correct.

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Definitions:

Form 1120S

A tax document used in the United States to report the earnings, losses, and dividends of S corporation shareholders.

Corporation

A legal entity that is separate and distinct from its owners. Corporations can own property, incur debts, sue, and be sued.

Permanent Accounts

Accounts in the general ledger that are not closed at the end of the accounting year, such as assets, liabilities, and equity accounts.

Temporary Accounts

Accounts used to track transactions within a specific accounting period, closed out at the end of the period, such as revenues, expenses, and dividends.