True or False1. Only the sole proprietorship andpartnership forms of business organizationcan resort to borrowing as their source offunds.2. Only a corporation can issue shares ofstock to the public as a source of its capital.3. Corporation has more options on themanner it raises its capitalization, ascompared to other forms of businessorganization.4. A bond certificate is a contract of debt.5. Stockholders are investees in acorporation.

“Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Answered: 1. Only the sole proprietorship and…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Write T or F. Then briefly explain. 1. Shareholders can transact business on behalf of the corporation. 2. All incorporators are shareholders but not all shareholders are incorporators.
2. It is the governing body in a non-stock Corporation. * A. Corporators B. Board of Directors C. Board of Trustees D. Corporate Officers
. Buying shares in a corporation is attractive to investors because: a All of these answers are correct. b Shares are easily transferred c Shareholders are not liable for the corporation's actions and debts d Shareholders are not agents of the corporation e A corporation has unlimited life. PLEASE EXPLAIN YOUR ANSWER AND DO NOT COPY FROM OTHER SOURCES AND ALSO NOT GIVEN IN IMAGE FORMAT
Which type of business will most likely have problems with insufficient funds for business? O Sole proprietorship Partnerships Corporations O LLCS
5. advantages of a C- corporation ordinarily include ease of capital accumulation, ready transferability of ownership rights, and both a limited life of the corporation and limited liability of the shareholders
(Multiple Choice) A corporation can only pay dividends to shareholders from its: 1. Legal Capital 2. Authorized Shares 3. Retained Earnings 4. Contributed Capital 5. Share Capital
95. Characteristics of the corporate form that have led to growth of this form of business ownership include all of the following, except O A. Ease of raising capital O B. Low government regulation O C. Limited liability D. Ease of ownership transfer
Which of the following is the primary element that distinguishes accounting for corporations from accounting for partnerships? a. The corporation draws a sharper distinction in accounting for sources of capital. b. The entity theory relates primarily to the other forms of business organization. c. In a corporation, retained earnings may be reduced only by the declaration of dividends. d. Generally accepted accounting principles apply to corporations but have relatively little applicability to other forms of business organizations.
Andrea has prepared the following list of statements about corporations.Identify each statement as true or false. 1. Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a partnership. TrueFalse 2. Limited liability of stockholders, government regulations, and additional taxes are the major disadvantages of a corporation. TrueFalse 3. When a corporation is formed, organization costs are recorded as an asset. TrueFalse 4. Each share of common stock gives the stockholder the ownership rights to vote at stockholder meetings, share in corporate earnings, keep the same percentage ownership when new shares of stock are issued, and share in assets upon liquidation. TrueFalse 5. The number of issued shares is always greater than or equal to the number of authorized shares. TrueFalse 6. A journal entry is required for the authorization of capital stock. TrueFalse 7.…
Which of the following is the disadvantage of setting up a "Corporation"? Double taxation and limited capital Double taxation and agency problem Illiquidity and agency problem Illiquidity and double taxation
Which of the following does not make it easier for corporation to raise capital? a) limited liability b) double taxation c) perpetual existence d) free transferability
Which of the following is an advantage of ownership of a corporation over that of a sole proprietorship? I. The owners of the corporation have unlimited liability for the firm's debts II.It is the simplest to start III. The corporation has an unlimited life. IV. Dividends recieved by the corporation's shareholders are tax-exempt a. I only b. II only c. III only d. II and III only e. II and IV only

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