Which of the Following Is a Characteristic of Corporations

question 80

Multiple Choice

Which of the following is a characteristic of corporations?

• A) They pay taxes on their profits.
• B) They provide their investors with no liability.
• C) A change in ownership usually affects the corporation's legal and economic status.
• D) In case of bankruptcy, stockholders receive corporate assets before the claims of debt holders are satisfied.

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Definitions:

Impairment Loss

A charge against earnings representing the amount by which the carrying amount of an asset exceeds its recoverable amount.

Goodwill

An intangible asset that arises when a company acquires another business for more than the fair value of its net tangible and identifiable intangible assets.

Intangible Assets

Non-physical assets that represent a value to a company, such as patents, trademarks, copyrights, and goodwill.

Recoverable Amount

The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use.