Brad Is a Shareholder of Cloud Servers Inc

question 2

Multiple Choice

Brad is a shareholder of Cloud Servers Inc. He will be deemed to have a fiduciary duty to Cloud and its minority shareholders if he has a sufficient number of shares to​

• A) ​assert the business judgment rule.
• B) ​bring a shareholder's derivative suit.
• C) ​exercise de facto control.
• D) ​participate in a cumulative vote.

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Definitions:

Finished Goods Inventory

This is the account that contains the cost of finished goods that are ready to be sold but are still in stock.

Absorption Costing

Absorption Costing is a method of inventory costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Operating Income

Profit generated from a company's regular business operations, excluding deductions for interest and taxes.

Property Tax Expense

The amount paid by property owners to municipal or local governments based on the assessed value of their property.