ch11 - CHAPTER 11 MULTIPLE CHOICE STUDY GUIDE THESE...

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CHAPTER 11 MULTIPLE CHOICE STUDY GUIDE THESE QUESTIONS FORM THE BASIS FOR THE CONCEPTS EXAM 50. Under the corporate form of business organization a. a stockholder is personally liable for the debts of the corporation. b. stockholders' acts can bind the corporation even though the stockholders have not been appointed e as agents of the corporation. c. the corporation's life is stipulated in its charter. d. stockholders wishing to sell their corporation shares must get the approval of other stockholders. Ans: c, SO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Communications, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting 60. Ed Tresh has invested $400,000 in a privately held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Tresh stand to lose? a. Up to his total investment of $400,000. b. Zero. c. The $400,000 plus any personal assets the creditors demand. d. $200,000. Ans: a, SO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Investment Decisions 61. Which of the following statements reflects the transferability of ownership rights in a corporation? a. If a stockholder decides to transfer ownership, he must transfer all of his shares. b. A stockholder may dispose of part or all of his shares. c. A stockholder must obtain permission from the board of directors before selling shares. d. A stockholder must obtain permission from at least three other stockholders before selling shares. Ans: b, SO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Communications, AICPA BB: Legal/Regulatory, AICPA FN: Decision Modeling, AICPA PC: None, IMA: Corporate Finance 66. The ability of a corporation to obtain capital is a. enhanced because of limited liability and ease of share transferability. b. less than a partnership. c. restricted because of the limited life of the corporation. d. about the same as a partnership. Ans: a, SO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector, AICPA FN: Decision Modeling, AICPA PC: Professional Demeanor, IMA: Corporate Finance 69. What is ordinarily the first step in the formation of a corporation? a. Development of by-laws for the corporation b. Issuance of the corporate charter c. Application for incorporation to the appropriate Secretary of State d. Registration with the SEC Ans: c, SO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics 70. Which one of the following is not an ownership right of a stockholder in a corporation? a. To vote in the election of directors b. To declare dividends on the common stock c. To share in assets upon liquidation d. To share in corporate earnings Ans: b, SO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Decision Modeling, AICPA PC: Problem Solving, IMA: Business Economics
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This note was uploaded on 03/07/2011 for the course ENG 101 taught by Professor Heinlein during the Spring '11 term at Indiana Northwest.

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ch11 - CHAPTER 11 MULTIPLE CHOICE STUDY GUIDE THESE...

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