In Which of the Following Classes of Corporation Are the Controlling

question 29

Multiple Choice

In which of the following classes of corporation are the controlling shareholders the only managers of the business?

• A) For-profit corporation
• B) Close corporation
• C) Not-for-profit corporation
• D) Publicly held corporation

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Definitions:

Variable Expenses

Costs that change in proportion to the level of activity or volume of production.

Sales

The transactions involving the exchange of goods or services for payment.

Net Operating Income

A measure of profitability that calculates the difference between a company's operating revenue and its operating expenses, excluding taxes and interest.

Fixed Expenses

Fixed expenses are costs that do not change with the level of production or sales, such as rent or salaries.