AWMA Test Review 1 Questions & 100% Correct Answers
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Course
AWMA
Institution
AWMA
If ABC Corporation has net profits of $100,000 and distributes $50,000 as
dividends, what is its taxable income?
A. $0
B. $25,000
C. $50,000
D. $100,000
~~> The net profits of a corporation are subject to federal income
taxation. This tax is levied on corporate taxable income befor...
✓ ~~> commonly used by employers to informally fund future benefit
obligations such as those promised under a deferred comp plan. As
the owner of the policies the employer is responsible for paying the
premiums. The employer is also the beneficiary of the policies and
retains all rights to policy benefits, including the cash value buildup and
the death proceeds.
COLI is attractive to employers because it
✓ ~~> 1. Provides psychological assurance to deferred comp plan
participants that their benefit are secure.
2. reduces strain on the companys cash flow when plan distributions are due
3. provides tax-deferred, and possibly tax free buildup of cash value; and
4. enables the employer to recover some/all of the plan costs.
Changes that have occurred since investment firms changed from private
partnerships to publicly traded companies include all of the following except:
A. risk taking has increased.
B. profits can be privatized (bonuses) and losses socialized (bailouts).
C. there is greater individual accountability.
D. partners no longer share in both the profits and losses of the firm.
Master01 | September, 2024/2025 | Latest update
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