A Corporation

question 30

Multiple Choice

A corporation:

• A)Is a legal entity separate and distinct from its owners.
• B)Must have many owners.
• C)Has shareholders who have unlimited liability for the acts of the corporation.
• D)Is the same as a limited liability partnership.
• E)Does not have to pay taxes.

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Definitions:

Allowance Account

An account used to offset the total amount of accounts receivable due to the likelihood that some accounts will not be collected.

Bad Debts Expense

An expense account that represents the cost of credit sales that are considered to be uncollectible, reducing net income on the income statement.

POSSLQs

An acronym standing for "Persons of Opposite Sex Sharing Living Quarters," used to describe cohabitating couples who are not married.