FUND.ACCT.PRIN.
FUND.ACCT.PRIN.
25th Edition
ISBN: 9781260247985
Author: Wild
Publisher: RENT MCG
Question
Book Icon
Chapter 13, Problem 1QS
To determine

Concept Introduction:

The Corporate form of organization:

There are several forms of business organizations like proprietorship, partnership, limited liability partnership, Corporation etc. The Corporate form is the most complicated and wider form of business organization. It creates a separate legal identity of the business and allows the business to raise funds through public issue.

Characteristic of a corporation are as follows:

  • Separate legal entity: The Corporate form of business has its own legal identity and owners are personally liable for the debt of the corporation.
  • Easy availability of funds: As compared with other business form, a corporate form of business can easily raise find by making public issues of its shares.
  • Separate taxability: The Corporate form of business has its own legal identity and hence it is separately taxed. Hence owners are not liable for the tax liability of the company.
  • Limited liability of shareholders: Shareholders or owners of the company have limited liability. They are not personally liable for the debts of the company.
  • Easy transfer of ownership: In the case of a company the ownership is transferred only by the transferring the shares of the company.

To identify:

The true statements about Characteristic of a corporate form of organization

Expert Solution & Answer
Check Mark

Explanation of Solution

The true statements about Characteristic of a corporate form of organization are following:

1. Ownership rights cannot be easily transferred.

4. Corporate income that is usually taxed twice.

5. It is a separate legal entity.

7. Owners are not agents of the corporation

Following other statements are false for the corporate form of organization:

2. Owners have unlimited liability for corporate debts.

3. Capital is more easily accumulated than with most other forms of organization

6. It has a limited life.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Chapter 13 Solutions

FUND.ACCT.PRIN.

Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education