If a Court Determines That a Manager's Corporate Decision Amounted

question 31

Multiple Choice

If a court determines that a manager's corporate decision amounted to self-dealing,

• A)the business judgment rule will not apply.
• B)the transaction being challenged will be automatically voided.
• C)the manager is automatically personally liable to the corporation.
• D)the manager will automatically be fired.

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Definitions:

Equipment

Assets used in the production or supply of services, often subject to depreciation over their useful lives.

Owner's Capital

The amount of money and other forms of assets invested into a business by the owner(s), minus any withdrawals, representing the owner’s equity.

Accounts Debited

The accounts on the left side of the accounting equation that increase with a debit transaction and decrease with a credit transaction.

Accounts Credited

Refers to the entries made on the credit side of a ledger, indicating a reduction in assets or an increase in liabilities or equity.