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

When a corporation is formed, it is granted which of the following rights?

The right to avoid all forms of taxation

The right to issue currency

The right to vote in federal elections

The right to enter into contracts in its own name

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Verified step by step guidance

Understand the concept of a corporation: A corporation is a legal entity that is separate from its owners and is granted certain rights and responsibilities under the law.

Review the rights typically granted to a corporation: These include the ability to enter into contracts, own property, sue and be sued, and comply with taxation laws.

Clarify misconceptions about corporations: Corporations do not have the right to avoid taxation, issue currency (this is reserved for governments), or vote in federal elections (this is reserved for individuals).

Focus on the correct answer: A corporation is granted the right to enter into contracts in its own name, which is a fundamental aspect of its legal status as a separate entity.

Relate this to financial accounting: Understanding the rights of a corporation is important for recording transactions and preparing financial statements, as contracts often form the basis for financial obligations and revenues.