Which of the Following Is True Regarding Corporations

question 26

Multiple Choice

Which of the following is true regarding corporations?

• A) A corporation is not a separate legal entity.
• B) A corporation may not be sued.
• C) A corporation is created according to federal law.
• D) Shareholders may typically be held liable for debts of the corporation.
• E) The corporation must pay taxes on profits, and shareholders must pay taxes on dividends they receive from the corporation.

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Definitions:

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where demand equals supply.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or commodity.

Gallon

A unit of measurement for volume, primarily used in the United States, equal to 128 fluid ounces, or approximately 3.785 liters.

Quantity Supplied

Quantity Supplied is the amount of a good or service that producers are willing and able to offer for sale at a particular price over a given period.