Andrea has prepared the folloving list of statements about corporations. Identify whether each statement is true or false. 1. A corporation is an entity separate and distinct from its ovners. As a legal entity, a corporation has most of the rights and privileges of a person. Most of the largest U.S. corporations are privately held corporations. 2. 3. 4. Corporations may buy, ovin, and sell property; borrow money; enter into legally binding contracts; and sue and be sued. 5. The net income of a corporation is not taxed as a separate entity. 6. Creditors have a legal claim on the personal assets of the ovners of a corporation if the corporation does not pay its debts. 7. The transfer of stock from one ovner to another requires the approval of either the corporation or other stockholders. 8. The board of directors of a corporation legally owns the corporation. 9. The chief accounting officer of a corporation is the controller. 10. Corporations are subject to fewer state and federal regulations than partnerships or proprietorships. > >

Andrea has prepared the folloving list of statements about corporations. Identify whether each statement is true or false. 1. A corporation is an entity separate and distinct from its ovners. As a legal entity, a corporation has most of the rights and privileges of a person. Most of the largest U.S. corporations are privately held corporations. 2. 3. 4. Corporations may buy, ovin, and sell property; borrow money; enter into legally binding contracts; and sue and be sued. 5. The net income of a corporation is not taxed as a separate entity. 6. Creditors have a legal claim on the personal assets of the ovners of a corporation if the corporation does not pay its debts. 7. The transfer of stock from one ovner to another requires the approval of either the corporation or other stockholders. 8. The board of directors of a corporation legally owns the corporation. 9. The chief accounting officer of a corporation is the controller. 10. Corporations are subject to fewer state and federal regulations than partnerships or proprietorships. > >

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 14MCQ

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Andrea has prepared the following list of statements about corporations.Identify each statement as true or false. 1. Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a partnership. TrueFalse 2. Limited liability of stockholders, government regulations, and additional taxes are the major disadvantages of a corporation. TrueFalse 3. When a corporation is formed, organization costs are recorded as an asset. TrueFalse 4. Each share of common stock gives the stockholder the ownership rights to vote at stockholder meetings, share in corporate earnings, keep the same percentage ownership when new shares of stock are issued, and share in assets upon liquidation. TrueFalse 5. The number of issued shares is always greater than or equal to the number of authorized shares. TrueFalse 6. A journal entry is required for the authorization of capital stock. TrueFalse 7.…
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Which of the following is not something that corporations can do with their profits? a. Pay income tax to the government b. They can do all of these. c. Pay them to shareholders d. Hold profits within the firm
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