Which of the following is true about corporations
Which of the following is true of a corporation?
Which of the following is a feature of a corporation?
The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management.
Which of the following is an advantage of the corporate form of organization?
What happens if no par value stock does not have a stated value?
When no-par value stock does not have a stated value, the entire proceeds from the issuance of the stock becomes legal capital.
What are examples of corporations?
Almost all large businesses are corporations, including Microsoft Corp., the Coca-Cola Co., and Toyota Motor Corp. Some corporations do business under their names and also under separate business names, such as Alphabet Inc., which famously does business as Google.
What is most characteristic of corporations quizlet?
- Legal Entity.
- Legally a person (same rights)
- Limited Liability.
How does a corporation recognize a deficit in retained earnings?
Companies report negative retained earnings as accumulated deficit in the balance sheet. The accumulated deficit is a note to the original retained earnings account. … A company could be in an imminent danger of bankruptcy if the negative assets on the balance sheet has exceeded the amount of contributed capital.
What is stated capital of a corporation?
Why is par value important?
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. … Par value for a share refers to the stock value stated in the corporate charter.
How do companies use retained earnings?
Retained earnings can be used to pay additional dividends, finance business growth, invest in a new product line, or even pay back a loan. Most companies with a healthy retained earnings balance will try to strike the right combination of making shareholders happy while also financing business growth.
Where does retained earnings appear?
balance sheetRetained earnings are a type of equity and are therefore reported in the shareholders’ equity section of the balance sheet.
What is deficit on a balance sheet?
In financial accounting, the company has a deficit if the retained earnings figure is negative. This indicates the firm’s equity is less than the amount investors originally paid for the stock.
Why retained earnings are liabilities?
Which of the following correctly describes retained earnings?
The answer is B. It represents the investments by stockholders in a company. Retained earnings is the leftover of net income after dividend payment….
What are a companies earnings?
Is accounts receivable an asset?
Accounts receivable is an asset account on the balance sheet that represents money due to a company in the short term. Accounts receivables are created when a company lets a buyer purchase their goods or services on credit.
Is Notes Receivable an asset?
A note receivable is a written promise to receive a specific amount of cash from another party on one or more future dates. This is treated as an asset by the holder of the note.
Is share capital an asset?
No, equity share capital is not an asset. But the investor who buys equity shares of the company brings in cash in exchange for the shares given. This increases the assets of the company. … It comes under the head “Equity & Liabilities” in the balance sheet.
Is cash an asset?
Current assets are assets that can be converted into cash within one fiscal year or one operating cycle. Current assets are used to facilitate day-to-day operational expenses and investments. Examples of current assets include: Cash and cash equivalents: Treasury bills, certificates of deposit, and cash.
Is goodwill an asset?
Goodwill is an intangible asset that accounts for the excess purchase price of another company. Items included in goodwill are proprietary or intellectual property and brand recognition, which are not easily quantifiable.