Quick Study Solutions QS 13-1 Characteristics of corporations LO¹ Of the following statements, which are true for the corporation form of business? a. Capital often is more easily accumulated than with other forms of organization. b. It has a limited life. c. Owners have unlimited liability for corporate debts. d. It is a separate legal entity. e. Ownership rights cannot be easily transferred.
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- 26 S1: Consolidated financial statements are typically prepared when one company has controlling financial interest unless such control is likely to be temporary.S2: Acquisition related costs in a business combination includes professional or consultancy fees, costs of registering and issuing debt and equity securities and general administrative costs. Group of answer choices False; False False; True True; False True; True6 Fill in the blanks. In case of a corporation, equity is subordinate to liabilities so that, when a corporation is liquidated, liabilities must be fully settled before residual assets are distributed to shareholders. Therefore, liabilities and equity are NOT ( ) ( ). There should be two words to fill in the blanks. I appreciate it if you could suggest several possible answers (maximum 3), as well as your best answer.11. A corporation may incur agency costs because: A. Managers may not attempt to maximize the value of the firm to shareholders.B. Shareholders incur monitoring costs.C. All of the responses are correct.D. Of the separation of ownership and management. 12. A firm's investment decision is also called its A. liquidity decision.B. financing decision.C. leasing decision.D. capital budgeting decision. 13. A corporation, potentially, has infinite life because it A. has the same ownership and management.B. is a legal entity.C. is closely regulated.D. has limited liability.
- D3) Finance Summarize the author’s position in “S Corps, C Corps, and B Corps, based on the article "Oh My! Corporate Structure Matters” on converting corporations to B Corporations. Do you agree or disagree?QUESTION 2 Q2. A common problem for closely held corporations is: an abundance of agency problems. lack of access to substantial amounts of capital. that shareholders receive only one vote each. the separation of ownership and management.13. A corporation, potentially, has infinite life because it A. has the same ownership and management.B. is a legal entity.C. is closely regulated.D. has limited liability. 15. Which of the following assets is tangible? A. ExxonMobil's corporate headquarters buildingB. Apple Inc.'s trademarkC. Microsoft's technical expertiseD. Hewlett-Packard's most recent printer patent
- 6. Which of the following is an advantage of forming a corporation? Question 6 options: Easy to maintain. Zero liability. Increased access to resources No taxes. Previous PageNext PageChapter 11 - Question 2: (a) What is meant by the limited liability of a stockholder? (b) Does this characteristic enhance or reduce a corporation’s ability to raise capital? (c) Explain.Discuss Mark 10:23-25 and its application to capital rationing and maximizing shareholder wealth. Capital rationing could affect the returns to shareholders. An ethical dilemma is faced by the executives of the business. Capital rationing could affect the stakeholders (other than the shareholder) of the business. Should capital constraints modify the principle of maximizing shareholder wealth?
- 1. Many businesses are set up as limited companies. These are owned by shareholders and run by the board of directors. Which of the following are disadvantages of limited company status? a) The impression of a soundly based business organisation (though incorporation does not guarantee reliability or respectability) b) Easier to raise capital c) Must comply with legal and regulatory requirements d) Shareholders’ liability for any losses is limited to the amount of their investment in the company 1.1 A loan repayment to a bank would be recorded in the nominal ledger as: a) Dr Bank Cr Capital b) Dr Loan Cr Bank c) Dr Loan Cr Bank d) Dr Bank Cr ReservesHh2. You are the controller of a mid-size private corporation. Your company’s shares are held by a small group of individuals, most of whom are in positions of upper management of the company. You yourself are NOT a shareholder. Your company is in technology and is looking to get additional capital so it can grow. Unfortunately, they can presently only produce ‘Notice to Reader’ Financial statements. How could Sage 50 benefit them as they grow, and need to get up to the point of providing CPA Reviewed or Audited financials?