The Revised Act Permits a Corporation to Purchase, Redeem, or Otherwise

question 19

Multiple Choice

The Revised Act permits a corporation to purchase, redeem, or otherwise acquire its own shares unless:

• A) the corporation's total assets after the distribution would be less than the sum of its total liabilities and the maximum amount that then would be payable for all outstanding shares having preferential rights in liquidation.
• B) the corporation would be unable to pay its debts as they became due in the usual course of its business.
• C) Both of these are correct.
• D) None of these are correct.

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Definitions:

Cost Accounting System

A system of accounting for recording, classifying, allocating, summarizing, and analyzing various alternative courses of action for controlling costs.