Question

The responsibility for the overall management of a corporation belongs to:

A. the board of directors.
B. the shareholders.
C. the employees. the chief financial officer.
Corporations are taxed by:
Astate and federal governments.
B the federal government only.
C. the state government where they do business only.
D. the state government where they are incorporated only.
In simple terms, an "S" corporation could be defined as:
A. a corporation whose shareholders are taxed like shareholders but who face full, significant liability.
. a corporation regulated by the securities industry.
C. a corporation whose shareholders have limited liability but avoid corporate income taxes.
D. a corporation composed entirely of licensed professionals.

Answer 1

1. The board of directors is responsible for managing a corporation. So, the correct answer is A. the board of directors.

2. Corporations pay taxes to both state and federal governments. So, the correct asnwer is A. state and federal governments.

3. An 'S' corporation allows shareholders to have limited liability and avoid corporate income taxes by passing income and losses to their personal tax returns. So, the correct asnwer is C. a corporation whose shareholders have limited liability but avoid corporate income taxes.

Step-by-step explanation:

1. The responsibility for the overall management of a corporation belongs to the board of directors.

These individuals are elected by the shareholders, who are the firm's owners.

The board hires top day-to-day management and ensures the company is run in the best interest of the owners.

Thus, the correct answer is A. the board of directors.

2. Corporations are taxed by both state and federal governments.

This means they must pay taxes to the federal government and usually also to the state government where they conduct business or are incorporated.

Therefore, the correct asnwer is A. state and federal governments.

3. An "S" corporation is defined as a special type of corporation created through an IRS tax election.

An "S" corporation's shareholders have limited liability but enjoy the benefit of passing corporate income, losses, deductions, and credits through to their personal tax returns, thus avoiding the double taxation that conventional corporations are subject to.

Hence, the correct asnwer is C. a corporation whose shareholders have limited liability but avoid corporate income taxes.