Which of the Following Corporate Characteristics Is a Disadvantage of a Corporation

question 73

Multiple Choice

Which of the following corporate characteristics is a disadvantage of a corporation?

• A)Stockholders of a corporation have limited liability.
• B)A corporation has a continuous life.
• C)There is no mutual agency among the stockholders and the corporation.
• D)Earnings of a corporation are taxed twice.

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Definitions:

Acquisition Differential

The difference between the cost of an acquisition and the fair value of the net identifiable assets acquired.

Ownership Interest

Refers to the percentage or portion of a company that is owned by a shareholder, indicating a claim on assets and possibly a right to the income of the company.

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee but does not control it outright.

Voting Shares

Shares that give the shareholder the right to vote on company matters, such as electing directors and approving company policies.