AceCom Corporation Issues Dividends to Its 30 Shareholders

question 90

Multiple Choice

AceCom Corporation issues dividends to its 30 shareholders.Each shareholder is well aware that the corporation will be insolvent and unable to pay its creditors following the dividend distribution.Efone is one such creditor.Under the Model Business Corporation Act (MBCA) ,primary liability to Efone:

• A)does not lie with the shareholders because they can never be held liable to creditors of the corporation.
• B)lies with the shareholders because they received the distribution from the corporation with knowledge of the impending insolvency.
• C)lies with the directors because they authorized the unlawful distribution of dividends.
• D)does not lie with the directors because they placed the interests of the shareholders above everything else.

Understand the division of profits and losses in partnerships and the legal implications.

Apply the correct accounting entries for partnership formation, investment by partners, and allocation of profits and losses.

Understand the impact of valuation errors on partnership accounting and financial statements.

Describe the dissolution process of a partnership and the factors that can lead to it.

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Definitions:

Cell-Mediated Immunity

A type of immunity where T lymphocytes directly attack and destroy infected or abnormal cells.

Red Bone Marrow

A type of marrow found in some bones that produces red blood cells, white blood cells, and platelets.

Antibody-Mediated Immunity

A aspect of the immune response where B cells produce antibodies that are specific to antigens of pathogens, leading to their neutralization or destruction.

Cell-Mediated Immunity

An immune response that does not involve antibodies but rather involves the activation of phagocytes, antigen-specific cytotoxic T-lymphocytes, and the release of various cytokines in response to an antigen.