Which of the Following Statements Is True of a Corporation

question 125

Multiple Choice

Which of the following statements is true of a corporation?

• A)The liabilities of the corporation can be paid by the personal assets of the shareholders.
• B)Shares of stock cannot be readily bought and sold by investors on the open market.
• C)Shareholders are authorized to sign contracts or make business commitments on behalf of the corporation.
• D)Corporations pay income tax on corporate earnings, and shareholders pay personal income tax on corporate dividends and gains from sale of stock.

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Definitions:

Decision Making

The process of identifying and choosing alternatives based on the values, preferences, and beliefs of the decision-maker.

Consumers

Individuals or groups who purchase goods and services for personal use.

Employees

Individuals who work for a company or another person and receive compensation for their labor or services.

State

A politically organized body of people under a single government, often recognized as a sovereign entity.