Multiple Choice
Which of the following is NOT one of the considerations when selecting a business structure?
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1. Introduction to Accounting
Business Organization
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When a corporation is formed, which of the following is typically issued to represent ownership in the corporation?
A
Common stock certificates
B
Bond indentures
C
Promissory notes
D
Partnership agreements
Verified step by step guidance1
Understand the concept of ownership in a corporation: Ownership in a corporation is typically represented by shares of stock, which signify an individual's or entity's stake in the company.
Learn about common stock certificates: Common stock certificates are physical or electronic documents issued by a corporation to represent ownership of shares. They include details such as the shareholder's name, the number of shares owned, and the corporation's name.
Differentiate between the options provided: Bond indentures are agreements related to debt financing, promissory notes are written promises to pay a specific amount, and partnership agreements are contracts used in partnerships, not corporations.
Recognize that common stock certificates are the correct answer: They are the standard method for representing ownership in a corporation, as opposed to the other options which serve different financial or legal purposes.
Conclude that when a corporation is formed, common stock certificates are typically issued to represent ownership in the corporation.
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