Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

12. Stockholders' Equity

Characteristics of a Corporation

Financial Accounting

12. Stockholders' Equity

Characteristics of a Corporation

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Multiple Choice

Which of the following is NOT a characteristic of a corporation?

Continuous life regardless of ownership changes

Unlimited liability of owners

Ability to issue shares of stock

Separate legal existence from its owners

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Verified step by step guidance

Understand the concept of a corporation: A corporation is a legal entity that is separate from its owners, providing limited liability to its shareholders and having the ability to issue shares of stock.

Review the characteristics of a corporation: These typically include separate legal existence, limited liability of owners, ability to issue shares of stock, and continuous life regardless of ownership changes.

Analyze the options provided in the question: Identify which characteristics align with the definition of a corporation and which do not.

Focus on the term 'Unlimited liability of owners': This is NOT a characteristic of a corporation. Corporations provide limited liability to their owners, meaning shareholders are not personally responsible for the corporation's debts beyond their investment.

Conclude that 'Unlimited liability of owners' is the correct answer because it contradicts the fundamental principle of limited liability in a corporation.