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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following best describes key characteristics of a corporation?

A corporation is a separate legal entity that can own property and enter into contracts.

Owners of a corporation have limited liability for the corporation's debts.

All profits of a corporation are distributed directly to shareholders without taxation.

A corporation's life is limited to the lifespan of its founders.

Previous problemNext problem

Verified step by step guidance

Understand the concept of a corporation: A corporation is a separate legal entity, meaning it exists independently of its owners. It can own property, enter into contracts, and conduct business in its own name.

Clarify the concept of limited liability: Owners (shareholders) of a corporation are not personally liable for the corporation's debts. Their liability is limited to the amount they have invested in the corporation.

Examine the taxation aspect: Unlike the statement in the problem, profits of a corporation are typically subject to double taxation. First, the corporation pays taxes on its profits, and then shareholders pay taxes on dividends received.

Analyze the lifespan of a corporation: A corporation's life is not limited to the lifespan of its founders. It can continue to exist indefinitely unless it is dissolved or liquidated.

Compare the statements provided in the problem to the characteristics of a corporation: Identify which statements align with the true characteristics of a corporation and which do not, based on the explanations above.