The Costs of Bringing a Corporation into Existence,including Legal Fees,promoter

question 166

Multiple Choice

The costs of bringing a corporation into existence,including legal fees,promoter fees,and amounts paid to obtain a charter,are called:

• A)Minimum legal capital
• B)Stock subscriptions
• C)Organization costs
• D)Cumulative costs
• E)Prepaid fees

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Definitions:

Capital Expenditures

Funds used by a company to acquire or upgrade physical assets such as equipment, property, or industrial buildings.

Functional Depreciation

A decrease in the usefulness or value of an asset resulting from obsolescence, wear and tear, or age.

Fixed Asset

A long-term tangible piece of property that a firm owns and uses in its operations to generate income.

Book Value

The net value of a company's assets minus its liabilities and preferred stock, reflecting the amount that shareholders would theoretically receive if the company was liquidated.