In the United States, there are three legal categories of firms: sole proprietorships, partnerships, and corporations. Which of the following is an advantage for corporations? A. Corporations have control by an owner. B. Corporations have no layers of management. c. Corporations have no double taxation of income. D. Corporations have greater ability to raise funds. O E. Corporations have unlimited personal liability. Which of the following is a disadvantage for corporations? A. Corporations have no stockholders. B. Corporations are costly to organize. c. Corporations have no ability to share risk. D. Corporations have unlimited personal liability. E. Corporations have limited ability to raise funds. O O O O O O O

In the United States, there are three legal categories of firms: sole proprietorships, partnerships, and corporations. Which of the following is an advantage for corporations? A. Corporations have control by an owner. B. Corporations have no layers of management. c. Corporations have no double taxation of income. D. Corporations have greater ability to raise funds. O E. Corporations have unlimited personal liability. Which of the following is a disadvantage for corporations? A. Corporations have no stockholders. B. Corporations are costly to organize. c. Corporations have no ability to share risk. D. Corporations have unlimited personal liability. E. Corporations have limited ability to raise funds. O O O O O O O

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 14MCQ

See similar textbooks

Similar questions

A C corporation can be described as: (a) A business that is separate and distinct from its owners, allowing the owners to conduct business while limiting their personal liability. (b) A business association defined by federal statute. (c) A legal entity that has more than one shareholder. (d) A type of corporation where owners have limited liability, and income, expenses, and deductions flow through to the shareholders and are taxed only at the shareholder level.
Do those who are unable or unable to operate under a conventional corporation's limitations have a predisposition toward starting their own business? Is there a reason for this or not?
Which of the following statements is true about different types of firms? O Corporations do not have limited liability O Owners of a corporation are liable for any obligations it enters into O Partnerships are the most common type of business firms in the world O A limited liability company is like a corporation because its owners are not personally liable for the firm's debts
Which of the following statements is CORRECT? a. Most business in the U.S. is conducted by corporations, and corporations' popularity results primarily from their favorable tax treatment. b. Corporations and partnerships have an advantage over proprietorships because a proprietor is exposed to unlimited liability, but the liability of all investors in the other types of businesses is more limited. c. Conflicts can exist between stockholders and managers, but potential conflicts are reduced by the possibility of hostile takeovers. d. A good goal for a firm's management is the maximization of expected EPS. e. For a stock to be in equilibrium, its intrinsic value must be greater than the actual market price.
Which of the following is true of a "Subchapter S Corporation"? The corporation is subject to double taxation. O The company is not really a corporation so it is not a separate entity from the stockholders and does not file a tax return. The owners' personal assets are protected from customers and creditors. O Tax on the business income of the company is paid only by the business. O Owners of the equity of this business are called "debtors".
Which of the following is an advantage of a corporation? ANSWER O O O O The earnings of a corporation are not taxed. Transfer of corporation ownership is easy. Startup costs for a corporation are less expenses than other business forms. Stockholders have unlimited liability. I DON'T KNOW YET
An advantage of a corporation is that A-They have little government regulation. B-Owners have complete control and don't answer to shareholders. C-Owners have limited liability for debt. D-Owners pay fewer taxes than other businesses.
One of the following characteristics of a corporation is deemed a disadvantage. Which is it? a. Ownership transfer b. Double Taxation c. Easy Ability to Raise Capital d. Limited Liability Protection e. None of the above.
The accumulated earnings tax, which is imposed on corporations for the accumulation of earnings in excess of reasonable business needs, does not apply to: a. Closely-held corporations. b. Widely-held corporations. c. Corporations subject to the personal holding company tax. d. Both "Widely-held corporations" and "Corporations subject to the personal holding company tax". e. All of these choices are correct.
Owners have no personal liability under which legal business structure? A. a corporation B. a partnership C. a sole proprietorship D. There is liability in every legal business structure.
Select the best term for each definition below. Definitions Terms a. Shareholders can lose no more than the amount they invest in the company. b. Corporate earnings are taxed twice—at the corporate level and individual shareholder level. c. Like an S corporation, but there are no limitations on the number of owners as in an S corporation. d. Traces the line of authority within the corporation. e. Allows for legal treatment as a corporation, but tax treatment as a partnership. f. Has stock traded on a stock exchange such as the New York Stock Exchange (NYSE). g. The first time a corporation issues stock to the public. h. Describes (a) the nature of the firm’s business activities, (b) the shares to be issued, and (c) the composition of the initial board of directors.
46. Which of the following is not one of the advantages of organizing a business as a corporation? The ability to raise capital is perhaps easiest when organized as a corporation. b. The dividends paid to owners of a corporation are exempt from federal, state, and local taxes. c. The liability of owners of a corporation is limited to the amount they invested in the business. d. Transferring ownership of a business is by far the easiest within the corporate form of business organization. a. ftho following is an example of a direct cost an organization might incur in producing a pro