True/False 1. Stockholder’s in a corporation are personally liable for the debts

Question

True/False 1. Stockholder’s in a corporation are personally liable for the debts of the corporation

. most corporations have continuous lives regardless of c hanges in the ownership of their stock

3. par value is an arbitrary amount assigned by a company to a share of its stock

4. a credit balance in retained earnings is referred to as a deficit

5. when a corporation sells par value stock at an amount greater than par value, other income is reported on the income statement 6. dividends become a liability of the corporation on the payment date

7. the owners of cumulative preferred stock must receive all dividends in arrears plus the current year’s dividends before the common stockholders get a dividend

8. a stocks market price is the price for w hich a person could buy or sell a share of the stock

9. the book value of a stock is the amount of stockholders’ equity on the company’s books for each share of its stock

Explanation / Answer

Solution.

1. True, Stockholder’s has limited libilitie regarding debt.

2. False

3. True.

4. False

5. False

6. True

7. True

8. True

9. True

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