FINANCIAL&MANAGERIAL ACCT.-CONNECT ONLY
FINANCIAL&MANAGERIAL ACCT.-CONNECT ONLY
9th Edition
ISBN: 9781266790539
Author: Wild
Publisher: MCG
Question
Book Icon
Chapter 11, Problem 1QS
To determine

Corporate:

It is the form of business organization in which business has its own separate legal entity. It provides advantage to owner of the business to have limited liability.

To identify: The given statements are true or false.

Expert Solution & Answer
Check Mark

Explanation of Solution

1.

False.

In corporate form of business, one of the features is that the ownership rights are easily transferrable.

Hence, the given statement is false.

2.

False.

In corporate form of business, one of the features is that the owners have limited liability; it means owners are responsible only up to the amount of their shares invested.

Hence, the given statement is false.

3.

True.

In corporate form of business, capital can be easily accumulated because in this form business can issue unlimited shares.

Hence, the given statement is true.

4.

True.

When dividend is paid, it is paid after payment of tax by company and after its payment as dividend, it becomes income for the shareholder and it taxed again under income tax.

Hence, the given statement is true.

5.

True.

In corporate form of business, business has its own entity according to law, it means owners and business is different.

Hence, the given statement is true.

6.

False.

Corporate form of business is based on going concern assumption; it means it is established for indefinite life.

Hence, the given statement is false.

7.

True.

Directors act as agents of the organization. Hence, it is true that the owners not act as agent fo the corporation.

Hence, the given statement is true.

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!
Students have asked these similar questions
Please provide the solution to this financial accounting question using proper accounting principles.
Below is information for Blue Company.  Using this information, answer the following questions on the "Calculation" tab in the file.  Show your work (how you got your answer) and format appropriately.                   Blue company has prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 to 1,500 units):                    Sales  $              40,000               Variable expenses                   24,000               Contribution margin                   16,000     NOTE:  Use the amounts in the original fact pattern to the left as your basis for the questions below.  Fixed expenses                   12,000               Net operating income  $                 4,000                                 Questions:                                    1.  What is the contribution margin per unit?             2.  What is the contribution margin ratio?               3.  What is…
I am looking for help with this financial accounting question using proper accounting standards.

Chapter 11 Solutions

FINANCIAL&MANAGERIAL ACCT.-CONNECT ONLY

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