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 corporate ownership?

Continuous life

Separate legal existence

Unlimited liability of shareholders

Transferability of shares

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Understand the concept of corporate ownership: Corporate ownership refers to the structure of a corporation where shareholders own shares of the company, and the corporation operates as a separate legal entity.

Review the characteristics of corporate ownership: Key characteristics include continuous life, separate legal existence, limited liability of shareholders, and transferability of shares.

Analyze the term 'Unlimited liability of shareholders': In corporate ownership, shareholders have limited liability, meaning they are only responsible for the amount they invested in the company. Unlimited liability is a characteristic of sole proprietorships or partnerships, not corporations.

Compare the options provided: Continuous life, separate legal existence, and transferability of shares are all characteristics of corporate ownership. Unlimited liability of shareholders is not a characteristic of corporate ownership.

Conclude that the correct answer is 'Unlimited liability of shareholders' because it contradicts the principle of limited liability, which is fundamental to corporate ownership.