Question :
Multiple Choice Questions
67. The costs of bringing a corporation into existence, : 1257701
Multiple Choice Questions
67. The costs of bringing a corporation into existence, including legal fees, promoter fees, and amounts paid to obtain a charter are called:
A. Minimum legal capital.
B. Stock subscriptions.
C. Organization expenses.
D. Selling expenses.
E. Prepaid fees.
68. The right of common shareholders to purchase their proportional share of any common stock later issued by the corporation is called a:
A. Preemptive right.
B. Proxy right.
C. Right to call.
D. Financial leverage.
E. Voting right.
69. A proxy is:
A. A document that delegates a stockholder’svoting rights to an agent.
B. A contractual commitment by an investor to purchase unissued shares of stock.
C. An amount of assets defined by state law that stockholders must invest and leave invested in a corporation.
D. The right of common stockholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common stock issued by the corporation.
E. An arbitrary amount assigned to no-par stock by the corporation’s board of directors.
70. The board of directors of a corporation:
A. Are elected by the corporate registrar.
B. Are responsible for day-to-day operations of the business.
C. Do not have the power to bind the corporation to contracts, due to lack of mutual agency.
D. May not also be executive officers of the corporation, due to the separate entity principle.
E. Are responsible for and have final authority for managing corporate activities.
71. The number of shares that a corporation’s charter allows it to sell is referred to as:
A. Issued stock.
B. Outstanding stock.
C. Common stock.
D. Preferred stock.
E. Authorized stock.
72. Par value of a stock refers to the:
A. Issue price of the stock.
B. Value assigned per share by the corporate charter.
C. Market value of the stock on the date of the financial statements.
D. Maximum selling price of the stock.
E. Dividend value of the stock.
73. When a corporation has only one class of stock, the stock is called
A. Preferred stock.
B. Common stock.
C. Par value stock.
D. Stated value stock.
E. No-par value stock.
74. In many states, the minimum amount that stockholders must contribute to the corporation, and which is intended to protect the creditors of the corporation, is called the:
A. Par value of preferred.
B. Minimum legal capital.
C. Premium capital.
D. Stated value.
E. Working capital.
75. The total amount of cash and other assets received by a corporation from its stockholders in exchange for its stock is:
A. Always equal to its par value.
B. Always equal to its stated value.
C. Referred to as paid-in capital.
D. Referred to as retained earnings.
E. Always below its stated value.
76. Stated value of no-par stock is:
A. Another name for redemption value.
B. An amount assigned to par value stock by the state of incorporation.
C. The market value of the stock on the date of issuance.
D. The difference between the par value of stock and the amount below or above par value paid-in by the stockholder.
E. An amount assigned to no-par stock by the corporation’s board of directors.
