Which of the Following Is an Incorrect Statement Regarding the Corporate

question 22

Multiple Choice

Which of the following is an incorrect statement regarding the corporate form of business organization?

• A) The dominant form of business organization in the United States is the corporation.
• B) A corporation is a legal entity created by federal law.
• C) A corporation raises capital by issuing stock to investors.
• D) Although the corporation may have many owners, it is legally treated as a single person.

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Definitions:

Budget

An estimate of income and expenditure for a set period of time.

Master Budget

A comprehensive financial planning document that consolidates all of a company’s budgets for sales, production, overhead, administration, and others into one overall budget.

Safety Stock

An additional quantity of an item kept in the inventory to reduce the risk of stockouts due to uncertainties in supply and demand.

Budgeted Income Statement

A financial statement that projects income, expenses, and net profit for a future period based on management's expectations and budgeting process.