The Case of Harris V

question 16

Multiple Choice

The case of Harris v.Looney dealt with the issue of:

• A) a de facto corporation.
• B) the effect of an ultra vires act.
• C) personal liability for a debt by a person purporting to act as or on behalf of a corporation, knowing no corporation existed.
• D) defective incorporation.

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Definitions:

Financial Liability

An obligation that requires the entity to transfer economic benefits including money, goods, or services to another entity as a result of past transactions or events.

Convertible Debt

A type of bond or other form of debt that can be converted into a specified number of shares of the issuing company's stock at certain times during its life.

GAAP

Generally Accepted Accounting Principles, a set of accounting standards, principles, and procedures that companies must follow when compiling their financial statements.

APB

The Accounting Principles Board, which was an organization that set standards for financial reporting and accounting in the past, succeeded by the FASB.