Question

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 1

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.

...

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