One of the disadvantages of a corporation when compared to a partnership is that the stockholders have limited liability. b. the stockholders are treated as a separate legal entity from the corporation. the corporation and its stockholders are subject to double taxation of dividends. d. the corporation provides continuity of life.
Related questions
Match the items below by entering the appropriate answer letter choice from the column provided on the right.
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Match the items below by selecting the appropriate number in thespace provided.
| Net income retained in the corporation. | |
| The amount that must be retained in the business for theprotection of creditors. | |
| Preferred stockholders have a right to receive current andunpaid prior-year dividends before common stockholders receive anydividends. | |
| Creditors only have corporate assets to satisfy theirclaims. | |
| Responsible to stockholders for corporate activity. | |
| The amount assigned to each share of stock in the corporatecharter. | |
| Unit of ownership in a corporation. | |
| Enables stockholders to maintain their same percentageownership when new shares are issued. | |
| Corporation's own stock that has been reacquired by thecorporation but not retired. | |
| Total amount paid-in on capital stock. |
| 1. | Limited liability |
| 2. | Capital stock |
| 3. | Board of directors |
| 4. | Paid-in capital |
| 5. | Retained earnings |
| 6. | Preemptive right |
| 7. | Par value |
| 8. | Legal capital |
| 9. | Treasury stock |
| 10. | Cumulative feature |
1.If a stock is sold on the secondary market between one investor and another, what effect does that have on the financial statements of the company that originally issued the stock?
| Its revenues increase | ||
| Its "in excess" equity increases | ||
| It has a new asset | ||
| There is no effect since the sale or trade is among investors only |
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QUESTION 10
Which of the following is an advantage of the corporate form of business organization?
| double taxation | ||||||||||||||||||||||||||||||||||||||
| amount of regulation | ||||||||||||||||||||||||||||||||||||||
| limited liability | ||||||||||||||||||||||||||||||||||||||
| entrenched management 3. Ownership and profit distribution in a sole proprietorship are generally seen on its balance sheet respectively as
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