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Sheet1 Page 1 Chapter 38 Corporations Formation and Financing TRUE/FALSE QUESTIONS A1. Generally, there is a uniform body of national corporate law. ANSWER: F PAGE: 773 TYPE: N NAT: AACSB Analytic AICPA Legal B1. Corporate officers select the corporate directors. ANSWER: F PAGE: 773 TYPE: = NAT: AACSB Reflective AICPA Critical Thinking A2. Any change in shareholders affects the continued existence of a corporation. ANSWER: F PAGE: 773 TYPE: N NAT: AACSB Analytic AICPA Legal B2. A business incorporated in one state has an automatic right to do business in any other state. ANSWER: F PAGE: 777 TYPE: N NAT: AACSB Analytic AICPA Legal A3. A shareholder is not an owner of a corporation. ANSWER: F PAGE: 773 TYPE: = NAT: AACSB Analytic AICPA Legal TEST BANK AUNIT EIGHT: BUSINESS ORGANIZATIONS B3. A foreign corporation is a corporation formed in another country. ANSWER: F PAGE: 777 TYPE: N Sheet1 Page 2 NAT: AACSB Analytic AICPA Legal A4. Corporations are entitled to freedom of speech. ANSWER: T PAGE: 775 TYPE: N NAT: AACSB Analytic AICPA Legal B4. A close corporation may restrict the right of a shareholder to transfer stock by means of a shareholder agreement. ANSWER: T PAGE: 778 TYPE: = NAT: AACSB Analytic AICPA Legal A5. Unlike a principal and agent, a corporation is never liable for a tort of its officer. ANSWER: F PAGE: 775 TYPE: N NAT: AACSB Analytic AICPA Legal B5. A shareholder in a professional corporation can be liable for malpractice arising from the rendering of professional services. ANSWER: T PAGE: 780 TYPE: N NAT: AACSB Analytic AICPA Legal A6. A corporation cannot be formed without a profit-making purpose. ANSWER: F PAGE: 777 TYPE: = NAT: AACSB Analytic AICPA Legal CHAPTER 38: CORPORATIONSFORMATION AND FINANCING B6. A promoter is not personally liable for a preincorporation contract. ANSWER: F PAGE: 782 TYPE: N NAT: AACSB Analytic AICPA Critical Thinking A7. A public corporation is also known as a publicly held corporation. ANSWER: F PAGE: 777 Sheet1 Page 3 TYPE: = NAT: AACSB Reflective AICPA Legal B7. The choice of a corporate name is subject to state approval. ANSWER: T PAGE: 782 TYPE: N NAT: AACSB Analytic AICPA Legal A8. A shareholder in a professional corporation can avoid liability for his or her wrongful acts simply by incorporating. ANSWER: F PAGE: 780 TYPE: N NAT: AACSB Analytic AICPA Legal B8. A corporation has perpetual existence in most states unless stated otherwise in the articles of incorporation. ANSWER: T PAGE: 784 TYPE: = NAT: AACSB Analytic AICPA Legal A9. The minimum contacts rule determines in which state a corporation should be chartered. ANSWER: F PAGE: 782 TYPE: = NAT: AACSB Analytic AICPA Legal B9. The capital structure of a corporation cannot be set forth in the articles of incorporation.... View Full Document

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