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 a distinct feature of corporations that is not shared by sole proprietorships or partnerships?

Unlimited life for the business

Limited liability for owners

Personal liability for business debts

Direct management by owners

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Verified step by step guidance

Understand the key characteristics of corporations, sole proprietorships, and partnerships. Corporations are distinct in their structure and legal attributes compared to the other two forms of business.

Review the concept of 'limited liability.' In a corporation, owners (shareholders) are not personally liable for the debts of the business. This is a unique feature that sets corporations apart from sole proprietorships and partnerships.

Contrast this with sole proprietorships and partnerships, where owners typically have 'personal liability' for business debts. This means their personal assets can be used to settle business obligations.

Examine the concept of 'unlimited life.' Corporations have an unlimited life, meaning they continue to exist even if ownership changes or shareholders leave. Sole proprietorships and partnerships, on the other hand, may dissolve upon the departure or death of an owner.

Identify the correct answer by focusing on the distinct feature of corporations: 'Limited liability for owners.' This is the defining characteristic that is not shared by sole proprietorships or partnerships.