In: Economics
1.Which of the following describes the difference between S corporation taxation and C corporation taxation?
a. None of the alternatives are correct.
b. The shareholders of an C corporation are taxed on the entity level earnings whereas the shareholders of a S corporation are not taxed on the entity level earnings.
c. The shareholders of an S corporation are taxed on the entity level earnings whereas the shareholders of a C corporation are not taxed on the entity level earnings.
d. There is no difference.
2.A public corporation is which of the following?
a. A corporation that has its stock traded in a stock exchange.
b. A corporation created by a governmental authority.
c. A private corporation that goes public.
Answer:b. The shareholders of an C corporation are taxed on the entity level earnings whereas the shareholders of a S corporation are not taxed on the entity level earnings.
A C corporation (or C-corp) is a legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity.
S-corporations, like partnerships, are pass-through entities. That is, there is no federal income tax levied at the corporate level. Instead, an S-corporation’s profit is allocated to its shareholder(s) and taxed at the shareholder level.
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2. Answer: a. A corporation that has its stock traded in a stock exchange.
A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets