1) Which of the following is true of a corporation? A) A corporation cannot be p
ID: 2543053 • Letter: 1
Question
1) Which of the following is true of a corporation? A) A corporation cannot be privately held. B) The stockholders of a corporation have unlimited liability for the corporation's debt. C) The earnings of a corporation may be subject to double taxation. D) A corporation has a limited life. 2) Which of the following is an advantage of the corporate form of business? A) separation of ownership and management B) limited liability of stockholders C) less degree of government regulation D) low start-up costs 3) Outstanding stock represents shares of stock that A) are sold for the highest price B) have been issued but may or may not be held by stockholders C) have been authorized by state law D) are held by the stockholders 4) Which of the following is a basic right of stockholders? A) Stockholders may authorize a business contract on behalf of the corporation. B) Stockholders may determine the issue price of common stock. C) Stockholders may sell their stock back to the company if they wish. D) Stockholders may receive dividends from corporate earnings. 5) Retained earnings: A) Are never adjusted for anything other than net income or dividends. B) Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception. C) Represent an amount of cash available to pay shareholders. D) Represents the amount shareholders are guaranteed to receive upon company liquidation. E) Can only be appropriated by setting aside a cash fund. 6) Common Stock Dividend Distributable is an equity account. A) True B) FalseExplanation / Answer
1
Which of the following is true of a corporation?
Answer: C). The earnings of a corporation may be subject to double taxation.
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2
Which of the following are advantages of the corporate form of business ownership?
Answer:
A) separation of ownership and management
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3
Outstanding stock represent the share of stock that
Answer: d) are held by shareholder
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4
Which of the following is a basic right of a share holder
Answer: Stock holder may receive dividend from corporate earning
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5
Retained earning
Answer: are generally consist of a company's cumulative net income less any net losses and dividends declared since its inception.
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6
Common stock dividend distributable is an equity account
Answer:True
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