Matthew Brown Decides to Become a Part Owner of a Corporation.As

question 72

Multiple Choice

Matthew Brown decides to become a part owner of a corporation.As a part owner,he expects to receive a profit as payment because he has assumed the risk of

• A) serious inflation eroding the purchasing power of his investment.
• B) being paid before the suppliers and employees are paid.
• C) losing his home,car,and life savings.
• D) losing the money he has invested in the corporation and not receiving profits.
• E) the company giving all of the profits to local communities.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholders from its profits or reserves.

Primary Beneficiary

The primary beneficiary is the entity that has the controlling financial interest in a variable interest entity, and thus is the party that consolidates the entity's financial statements with its own.

Consolidation

The process of merging multiple financial statements of a parent company and its subsidiaries into a single, aggregated document for reporting purposes.

Intra-Entity Transactions

Transactions that occur between divisions or units within the same company, often used for internal accounting purposes.