Which of the Following Statements About the Operation of a Corporation

question 19

Multiple Choice

Which of the following statements about the operation of a corporation is correct?

• A) A corporation receives its charter from a state government.
• B) A corporate charter automatically expires in 99 years and must be renewed if the corporation wants to remain in business.
• C) Owners of a corporation have unlimited liability for any claims against their company.
• D) A corporation tends to be much easier to set up than a sole proprietorship or partnership.

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Definitions:

Inventory Control

A management system that oversees the ordering, storage, and use of components that a company will use in the production of the items it will sell as well as the finished products the company will sell.

Theft

An act of stealing; specifically, the illegal taking and removing of personal property with intent to deprive the rightful owner of it.

FIFO

"First In, First Out," an inventory valuation method where the first items purchased or produced are the first ones sold, impacting the value of remaining inventory.

Gross Profit

The financial measure obtained by subtracting the cost of goods sold from total sales revenue.