Common shareholders are considered the residual owners of a corporation. The term residual means that the common stockholders to. They are entitled to receive dividends every year in which the
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- Which statement is incorrect? a. Book value per share is the claim of a shareholder in the net assets of the corporation for every share held in the corporation. b. If a corporation has 2 classes of shareholders, the book value per share should be computed for both preference shares and ordinary shares. c. Book value per share assumes that assets are realized at book values and liabilities are liquidated at book values. Total gains (losses) on realization of assets and liquidation of liabilities, if there are any, are assumed to sum up to zero. d. Excess over par refers to the amount of shareholders’ equity in excess of the total par value of the preference shares and ordinary shares issued by the corporation. e. none of the aboveN4 common stockholders of a business enterprise are said to be the residual owners which mean that they a. have thr rights to specific assets of the business b. are entitled to a dividend every year in which the business earns profit c. can negotiate individual comtrscts on behalf of the enterprise d. bear the ultimate risks and uncertainties and recieve the benefits if enterprise ownership.A shareholder in a company: Select one: a. holds an ownership interest in the company. b. is entitled, but not guaranteed a distribution of the profit known as a dividend. c. in case of company liquidation, rank last in receiving the money they invested. d. all of the above are correct.
- Which of the following measures the portion of a corporations profit allocated to each outstanding share of common stock? A. retained earnings B. EPS C. EBITDA D. NOPATWhich statement is incorrect? * Book value per share is the claim of a shareholder in the net assets of the corporation for every share held in the corporation. If a corporation has 2 classes of shareholders, the book value per share should be computed for both preference shares and ordinary shares. Book value per share assumes that assets are realized at book values and liabilities are liquidated at book values. Total gains (losses) on realization of assets and liquidation of liabilities, if there are any, are assumed to sum up to zero. Excess over par refers to the amount of shareholders’ equity in excess of the total par value of the preference shares and ordinary shares issued by the corporation. none of the aboveWhich of the following items retain their character when they are passed through to shareholders of an S corporation? Wages paid Accelerated depreciation Net long-term capital gains Advertising expense All of the above retain their character when passed through
- I. Multiple Choice 1. A major disadvantage of a corporation is... a. Additional taxes b. Limited liability of stockholders c. Separate legal existence d. Transferable ownership rights 2. The stockholders' equity equals.…. a. Capital stock + Additional paid-in capital – Retained Earnings b. Common stock + Retained Earnings c. Paid-in Capital + Capital stock + Retained Earnings d. Total paid-in capital + Retained Earnings 3. XYZ Corporation issued 1,000 shares of $6 par value stock for a drilling machine. The stock market price was $9 per share. The drilling machine was advertised for sale at $10,500. The drilling machine should be recorded at... a. $6,000 c. $9,000 b. $4,000 d. $10,500Which of the following characteristics of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? Question 7Answer a. Separate legal entity b. Separation of ownership and management c. Transferability of ownership d. Limited liabilityProfits or losses are recorded in a share capital account. 1 point O TRUE O FALSE The main differences between profit reported by a proprietorship and a 1 point corporation are income tax expense and salaries paid to owners. O TRUE O FALSE
- The ability of any stockholder to transfer stock to another person without the knowledge or the consent of the other stockholders and without disturbing the normal activities of the corporation is called a. unlimited life. b. suitability for large scale operations. c. taxation of corporate earnings. d. transferable ownership units.Profits or losses are recorded in a share capital account. O TRUE O FALSE The main differences between profit reported by a proprietorship and a corporation are income tax expense and salaries paid to owners. O TRUE O FALSEBusiness income allocations from an S corporation to its shareholders are self-employment income to the shareholders.a. Trueb. False