Which of the Following Is True

question 144

Multiple Choice

Which of the following is true?

• A) under the partnership form of business organization, the owners are not personally liable for the debts of the business.
• B) when employees also own a business, their incentive to shirk is removed.
• C) the limited liability of stockholders under the corporate business structure makes it easier to raise equity capital.
• D) under the corporate form of business organization, the owners of the firm are personally liable for its debts.

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Definitions:

Negative NCI

A scenario where the non-controlling interest (minority interest) in a subsidiary has a debit balance, indicating that the subsidiary has incurred losses.

Accounting Standards

These are established rules and guidelines fiscal reporting must follow to ensure consistency, reliability, and comparability of financial statements.

Consolidated Financial Statements

Financial statements that aggregate the financial position, results of operations, and cash flows of a parent company and its subsidiaries, presenting them as a single economic entity.

Shareholder's Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership stake of shareholders.