Which of the Following Statements Is True

question 184

Multiple Choice

Which of the following statements is true?

• A)Corporations can issue stocks and bonds,while proprietorships cannot.
• B)Corporations have one owner,while proprietorships have many owners.
• C)Corporations face fewer taxes than do proprietorships.
• D)Proprietorships have limited liability while corporations have unlimited liability.

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Definitions:

Cash Flows

The entirety of monetary transactions coming into and going out of a corporation, crucially affecting its immediate financial resources.

Indirect Method

An approach to preparing the cash flow statement where the net income is adjusted for non-cash transactions and changes in working capital to estimate cash flows from operating activities.

Cash Dividends

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders in the form of cash.

Long-Term Investments

Assets that a company intends to hold for more than one year, including stocks, bonds, and real estate.