A Trust Is a Business Arrangement in Which Stock Owners

question 19

True/False

A trust is a business arrangement in which stock owners appoint beneficiaries and place their securities with trustees, who manage the company and pay a share of their earnings to the stockholders.

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Definitions:

Real Accounts

Permanent accounts in accounting that show the ongoing financial state of a company's assets, liabilities, and shareholders' equity.

Accounting Period

A specific period of time used for financial reporting, such as a month, quarter, or year.

Prepaid Rent

An advance payment for rent that is recorded as an asset on the balance sheet until it is consumed.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operating costs, from its total revenues.