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

All of the following are true about a corporation except:

Shareholders of a corporation have limited liability.

A corporation is a separate legal entity from its owners.

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

Ownership in a corporation is typically represented by shares of stock.

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Verified step by step guidance

Understand the concept of a corporation: A corporation is a separate legal entity from its owners, meaning it can own assets, incur liabilities, and enter into contracts independently of its shareholders.

Review the principle of limited liability: Shareholders of a corporation have limited liability, which means their personal assets are protected from the corporation's debts and obligations.

Examine the concept of ownership representation: Ownership in a corporation is typically represented by shares of stock, which can be bought, sold, or transferred.

Analyze the lifespan of a corporation: Unlike sole proprietorships or partnerships, a corporation's life is not limited to the life of its owners. It can continue to exist indefinitely unless dissolved or liquidated.

Identify the incorrect statement: Based on the analysis, the statement 'A corporation's life is limited to the life of its owners' is false because a corporation has perpetual existence.