Which of the following statements about earnings and profits

Which of the following statements about earnings and profits (E&P) is false?

	A.	A corporation can make taxable dividend distributions if it has current E&P, notwithstanding the fact that it may have a deficit in accumulated E&P.
	B.	A dividend is defined as paid out of either current or accumulated E&P.
	C.	E&P consists of two basic parts: current E&P and accumulated E&P.
	D.	The presumption is that every distribution is first made out of accumulated E&P and then from current E&P.

correct option is \"d\"

Options	Reason	True/False
A	If current E& P is positive ,a corporation can pay taxable dividend even if it has deficit accumulated E & P. (It is ignored)	True
B	dividend can be paid out of either current E&P or accumulated E &P to consitute a taxable dividend any excess payment will be treated as return on capital	True
C	E&P can be current or accumulated	True
D	Dividend is first paid out of current E& P and then excess payment up to accumulated E& P is made in chronological manner	False.