Under the Revised Model Business Corporation Act, If a Promoter

question 61

Multiple Choice

Under the Revised Model Business Corporation Act, if a promoter acts on behalf of a corporation knowing that incorporation has not yet been completed and liability occurs:

• A) the corporation becomes liable once formed, with the promoter shielded from liability.
• B) the principals of the forming corporation are liable, with the promoter shielded from liability.
• C) the promoter is jointly and severally liable for the liability incurred even after the corporation is formed.
• D) the promoter is personally liable, with the principals shielded from liability.

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Definitions:

Direct Method

A costing methodology that directly assigns specific costs to relevant objects without using allocation for indirect costs.

Cost Of Goods Sold

Costs directly related to the goods a company sells, covering both the materials' cost and the labor cost involved in making the product.

Balance Sheet Accounts

These are the accounts that reflect the financial position of a business at a specific point in time, including assets, liabilities, and equity.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, not including those classified as cash equivalents.