Bill and His Founding Team Were Talented Programmers

question 55

Multiple Choice

Bill and his founding team were talented programmers.The hard-working team handled all aspects of the business and continued doing so as the business grew.Soon, there were problems with the accounting system, and issues arose because they had misclassified an employee as a general contractor.Which of the following would be a likely cause of failure?

• A)lack of ability
• B)process inadequacy
• C)uncertainty
• D)inattention

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Definitions:

Paid-In Capital

Paid-in capital is the amount of money that a company has received from shareholders in exchange for shares of stock, exceeding the par or stated value of the shares.

Retained Earnings

The part of net earnings kept by the company instead of being paid out to its shareholders in the form of dividends.

Stock Dividend

A dividend payment made to shareholders in the form of additional shares, rather than cash, based on the proportion of shares already held.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders the right to vote on corporate matters and receive dividends.