The Purpose of Nonvoting Common Stock Is to ________

question 128

Multiple Choice

The purpose of nonvoting common stock is to ________.

• A) limit the voting power of the management
• B) allow the minority interest to elect one director
• C) raise capital without giving up any voting control
• D) give preference on distribution of earnings to those shareholders who own the stock

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue and expenses to show net income or loss.

Revenues

The income generated from normal business operations and includes discounts and deductions for returned merchandise.

Expenses

Outflows of resources or incurrences of liabilities that result in a decrease in the equity of a company, other than distributions to owners.

Accounts Receivable

Money owed to a company by its customers for goods or services provided on credit.