Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

An S corporation has the liability protections of a corporation but is taxed:

like a partnership, with income passing through to shareholders

at the corporate level only

as a nonprofit entity, exempt from federal income tax

like a sole proprietorship, with the owner paying self-employment tax on all income

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the concept of an S corporation. An S corporation is a type of corporation that meets specific Internal Revenue Code requirements, allowing it to pass income, losses, deductions, and credits directly to shareholders for federal tax purposes.

Step 2: Recognize the liability protections of an S corporation. Like a traditional corporation, an S corporation provides limited liability protection to its shareholders, meaning their personal assets are generally protected from business debts and liabilities.

Step 3: Learn how an S corporation is taxed. Unlike a traditional C corporation, which is subject to double taxation (taxed at the corporate level and again at the shareholder level), an S corporation is taxed similarly to a partnership. Income, losses, deductions, and credits pass through to shareholders, who report them on their personal tax returns.

Step 4: Compare the taxation of an S corporation to other entities. Unlike a sole proprietorship, where the owner pays self-employment tax on all income, or a nonprofit entity, which is exempt from federal income tax, an S corporation's income is taxed at the shareholder level, avoiding corporate-level taxation.

Step 5: Conclude that the correct answer is 'like a partnership, with income passing through to shareholders,' as this aligns with the taxation structure of an S corporation.