Shareholders of a Business Enterprise Are Said to Be the Residual

question 77

Multiple Choice

Shareholders of a business enterprise are said to be the residual owners.The term residual owner means that shareholders

• A)are entitled to a dividend every year in which the business earns a profit.
• B)have the rights to specific assets of the business.
• C)bear the ultimate risks and uncertainties and receive the benefits of enterprise ownership.
• D)can negotiate individual contracts on behalf of the enterprise.

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Definitions:

Total Assets

The sum of all assets owned by a company, including current, fixed, and intangible assets, indicating the total resources.

Total Liabilities

The sum of all financial obligations a company owes to external parties, including debts, accounts payable, and other liabilities.

Equity

The value of an ownership interest in property, including shareholders' equity in a corporation.

Journal

A Journal in accounting is the initial record where financial transactions are entered before they are posted to accounts in the ledger, serving as the primary point of documentation for business activities.