Reference no: EM132996123

Problem 1: Which of the following is NOT an advantageous feature of the corporate form of organization?

a) Limited liability.

b) Perpetual existence.

c) Transferability of ownership.

d) Double Taxation

Problem 2: A dividend declaration increases total stockholders' equity.

a) True b) False

Problem 3: When the common stock account is disclosed on the balance sheet, it is reported at:

a) current market value.

b) average issue price.

c) par or stated value.

d) lower of cost or market.

Problem 4: Which of the following statements is true?

a) Preemptive rights make it easy for a corporation to issue additional shares.

b) A corporate entity is typically of unlimited duration.

c) One purpose of a corporation is to avoid "double taxation."

d) A corporation can issue common or preferred stock, but not both.

e) None of these.