Which of the Following Statements Is TRUE? the Scale of a Corporation

question 46

Multiple Choice

Which of the following statements is TRUE? The scale of a corporation makes a difference to how the rules of corporate law operate because

• A) small corporations are taxed at different rates from large corporations.
• B) large corporations are better able to bear the risk of unauthorized liabilities than small corporations.
• C) large and small corporations are incorporated under different statutes.
• D) in large corporations the separation between management and shareholders makes it more difficult for shareholders to exercise their legal rights.
• E) only large corporations can carry on business in more than one jurisdiction.

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Definitions:

Inventory

The complete quantity of products and materials in a company's possession intended for future sale or manufacturing.

Cost Of Goods Sold

An accounting term that represents the direct expenses related to the production of goods sold by a company.

Statement Of Income

A financial report that shows a company’s revenues, expenses, and profits over a specific period, commonly referred to as an income statement or profit and loss statement.

ASPE

Accounting Standards for Private Enterprises; a set of accounting standards for privately-held companies in Canada, providing simpler alternatives to International Financial Reporting Standards (IFRS).