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 a corporation?

Ownership easily transferable through stock

Unlimited life

Owners are personally liable for business debts

Limited liability of shareholders

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Verified step by step guidance

Step 1: Understand the characteristics of a corporation. A corporation is a legal entity that is separate from its owners, providing certain advantages such as limited liability, ease of ownership transfer, and an unlimited life span.

Step 2: Analyze the options provided in the question. Each option represents a characteristic that may or may not apply to a corporation. Carefully evaluate each statement.

Step 3: Review the concept of 'limited liability.' In a corporation, shareholders are not personally liable for the debts of the business. This is a key feature of corporations.

Step 4: Compare the statement 'Owners are personally liable for business debts' with the concept of limited liability. This statement contradicts the principle of limited liability, which is a defining characteristic of corporations.

Step 5: Conclude that the statement 'Owners are personally liable for business debts' is NOT a characteristic of a corporation, as it conflicts with the concept of limited liability of shareholders.