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 an attribute of a conventional corporation?

Corporation dissolves upon death of a shareholder

Limited liability for shareholders

Unlimited liability for owners

Ownership is not transferable

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Verified step by step guidance

Understand the concept of a conventional corporation: A conventional corporation is a legal entity that is separate from its owners (shareholders). It has specific attributes that distinguish it from other business structures.

Review the concept of limited liability: In a conventional corporation, shareholders have limited liability, meaning their financial risk is limited to the amount they invested in the corporation. They are not personally liable for the corporation's debts or obligations.

Analyze the attribute 'Corporation dissolves upon death of a shareholder': This is not true for a conventional corporation. Corporations are designed to have perpetual existence, meaning they do not dissolve upon the death of a shareholder.

Evaluate the attribute 'Unlimited liability for owners': This is incorrect for a conventional corporation. Shareholders have limited liability, not unlimited liability.

Consider the attribute 'Ownership is not transferable': This is also incorrect. In a conventional corporation, ownership is typically transferable, as shares can be bought and sold without affecting the corporation's existence.