Acct2542 Essays

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Testbank to accompany Company Accounting 10e by Ken Leo, Jeffrey Knapp, Sue McGowan & John Sweeting Prepared by Peter Baxter [pic] © John Wiley & Sons Australia, Ltd 2015 Chapter 1: Nature and regulation of companies Multiple-choice questions 1. The advantages of a company over a partnership and sole trader do not include which of the following? a. Members are able to sell their shares at any time to another person without having to obtain permission from the other members. b. Members are liable for only a limited amount of the company’s debts. c. A company has a legal existence distinct from its owners. *d. A company is only entitled to raise small amounts of cash by issuing…show more content…
c. fewer than 100 employees at the end of the financial year. *d. fewer than 50 employees at the end of the financial year. Correct answer: d Learning Objective 1.2 ~ discuss the different types of companies which may be formed under the Corporations Act 2001 5. A proprietary company must have at least one shareholder and cannot have more than: a. 100 shareholders. *b. 50 shareholders. c. 20 shareholders. d. 500 shareholders. Correct answer: b Learning Objective 1.2 ~ discuss the different types of companies which may be formed under the Corporations Act 2001 6. A disclosing entity includes: a. a company that is not a reporting entity. *b. an entity which has its shares listed on the ASX. c. an entity which issues its shares only to the company directors. d. a small proprietary company. Correct answer: b Learning Objective 1.2 ~ discuss the different types of companies which may be formed under the Corporations Act 2001 7. The certificate of registration issued by the Australian Securities and Investments Commission is valid: a. for 12 months only and must be renewed annually. b. for a maximum period of 5 years. c. for 15 years. *d. until the company is deregistered. Correct answer: d Learning Objective 1.3 ~ describe the necessary documentation for forming a company 8. The replaceable rules built into the Corporations Act deal with which of the following?

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