When a Business Is Organized as a Corporation, Which of the Following

question 6

Multiple Choice

When a business is organized as a corporation, which of the following statements is true?

• A) Stockholders are liable for the debts of the business only in proportion to their percentage ownership of capital stock.
• B) Stockholders do not have to pay personal income taxes on dividends received, because the corporation is subject to income taxes on its earnings.
• C) Fluctuations in the market value of outstanding shares of capital stock do not affect the amount of stockholders' equity shown in the balance sheet.
• D) Each stockholder has the right to bind the corporation to contracts and to make other managerial decisions.

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Definitions:

Personal History

An individual's past experiences and events that have shaped their personality, beliefs, and behavior.

Dizygotic Twins

Also known as fraternal twins, are siblings born at the same time as a result of two separate eggs being fertilized by two different sperm, sharing about 50% of their DNA.

Fertilized Egg

A cell formed by the union of a male sperm and a female ovum, marking the beginning of embryonic development.

Embryos

Early stages of development in multicellular organisms after fertilization and before birth, during which the basic structures of the organism are formed.