ch 39 - Sheet1 Page 1 Chapter 39 Corporations¡ªDirectors,...

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Sheet1 Page 1 Chapter 39 Corporations¡ªDirectors, Officers, and Shareholders TRUE/FALSE QUESTIONS A1. Corporate officers govern every corporation. ANSWER: F PAGE: 796 TYPE: = NAT: AACSB Reflective AICPA Critical Thinking B1. No state permits a corporate board to have fewer than three directors. ANSWER: F PAGE: 796 TYPE: = NAT: AACSB Analytic AICPA Legal A2. A director is elected by a majority vote of the other members of the board. ANSWER: F PAGE: 796 TYPE: = NAT: AACSB Analytic AICPA Legal B2. Incorporators can appoint a corporation¡¯s first board of directors. ANSWER: T PAGE: 796 TYPE: N NAT: AACSB Analytic AICPA Legal A3. A director can be removed from a corporate board for cause. ANSWER: T PAGE: 796 TYPE: = NAT: AACSB Analytic AICPA Legal TEST BANK A¡ªUNIT EIGHT: BUSINESS ORGANIZATIONS B3. Few legal qualifications exist for directors. ANSWER: T PAGE: 796 TYPE: = NAT: AACSB Analytic AICPA Legal
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Sheet1 Page 2 A4. Shareholders may not vote to remove members of the board of directors. ANSWER: F PAGE: 796 TYPE: = NAT: AACSB Analytic AICPA Legal B4. A person must be a shareholder of a corporation to serve as a director. ANSWER: F PAGE: 796 TYPE: = NAT: AACSB Analytic AICPA Legal A5. Directors are responsible for all major corporate policy decisions. ANSWER: T PAGE: 796 TYPE: = NAT: AACSB Analytic AICPA Legal B5. A board of directors generally conducts business without holding formal meetings. ANSWER: F PAGE: 799 TYPE: = NAT: AACSB Analytic AICPA Legal A6. Directors are rarely compensated and cannot set their own compensation. ANSWER: F PAGE: 799 TYPE: N NAT: AACSB Analytic AICPA Legal B6. All directors must be present before a board can transact business. ANSWER: F PAGE: 799 TYPE: + NAT: AACSB Analytic AICPA Legal A7. A director is a fiduciary of a corporation. ANSWER: T PAGE: 801 TYPE: + NAT: AACSB Analytic
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Page 3 AICPA Legal B7. A board of directors can delegate some of its functions to corporate officers. ANSWER: T PAGE: 800 TYPE: + NAT: AACSB Analytic AICPA Legal A8. Unlike a director, an officer is not expected to be informed on corporate matters. ANSWER: F PAGE: 801 TYPE: N NAT: AACSB Analytic AICPA Legal B8. Corporate directors and officers are insurers of business success. ANSWER: F PAGE: 802 TYPE: = NAT: AACSB Analytic AICPA Legal A9. Directors are required to use a reasonable amount of supervision over the corporate officers. ANSWER: T PAGE: 802 TYPE: = NAT: AACSB Analytic AICPA Legal B9. A director may not sit on the board of more than one corporation at a time. ANSWER: T PAGE: 804 TYPE: N NAT: AACSB Analytic AICPA Legal A10. Shareholders do not have legal title to corporate property but an equitable interest in the firm. ANSWER: T
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