Question : Multiple Choice Questions 38.The advantages of corporations going public include : 1259468

 

Multiple Choice Questions  

38.The advantages of corporations going public include all of the following except:   

A. Professional management.

 

B. Transferability of ownership.

 

C. Limited shareholder liability.

 

D. Ability to remove assets.

 

 

 

 

39.Which of the following is not a characteristic of the corporate form of organization?   

A. The owners of a corporation cannot lose more than the amount of their investment.

 

B. Shares of stock in a corporation are more readily transferable than is an interest in a partnership.

 

C. Stockholders have authority to decide by majority vote the amount of dividends to be paid.

 

D. The corporation is a very efficient vehicle for obtaining large amounts of capital required for large-scale production.

 

 

 

 

40.A primary disadvantage of the corporate form of organization is:   

A. Unlimited personal liability for business debts.

 

B. Ownership is difficult to transfer.

 

C. Corporate earnings are subject to double taxation.

 

D. Corporation may continue its operations without disruption despite retirement of individual stockholders.

 

 

 

 

41.Public corporations are required by law or regulation to perform all of the following except:   

A. Submit much of their financial information to the SEC for review.

 

B. Make regularly scheduled dividend payments to all stockholders.

 

C. Have their annual financial statements audited by an independent CPA.

 

D. Disclose their financial information to the public.

 

 

 

 

42.Which of the following apply to closely held corporations?   

A. There is no organized market for buying and selling the company’s shares.

 

B. The company must prepare and issue its financial statements in conformity with generally accepted accounting principles.

 

C. The company must have its financial statements audited by an independent firm of CPAs.

 

D. The company’s financial information must be submitted to the Securities and Exchange Commission.

 

 

 

 

43.In a corporation’s organization chart, who has/have the highest position?   

A. Stockholders.

 

B. Board of directors.

 

C. CEO.

 

D. President.

 

 

 

 

44.The ownership of common stock in a corporation usually carries the following rights:   

A. To vote for directors.

 

B. To declare dividends.

 

C. To share in a distribution of assets if the corporation is to be liquidated.

 

D. Both to vote for directors and share in a distribution of assets if the corporation is to be liquidated.

 

 

 

 

45.The board of directors’ primary functions include all of the following except:   

A. Hiring corporate officers.

 

B. Setting officers’ salaries.

 

C. Declaring dividends.

 

D. Transacting corporate business.

 

 

 

 

46.Which of the following is not a right of stockholders?   

A. To vote for directors and on key issues.

 

B. To participate in dividends declared.

 

C. To share in the distribution of assets if the corporation is liquidated.

 

D. To select the Chief Executive Officer.

 

 

 

 

47.The rights of a common stockholder do not include the right:   

A. To vote for directors.

 

B. To withdraw a share of corporate net assets proportionate to the person’s stockholdings.

 

C. To receive a proportionate share of corporate assets upon liquidation, after creditors have been paid.

 

D. To share in profits when the board of directors declares a dividend.