A Corporation May Effectively Limit the Liability of Directors' Duty

question 8

Multiple Choice

A corporation may effectively limit the liability of directors' duty of due ________

• A) Using corporate funds to buy directors liability insurance
• B) Using the derivative action rule
• C) Specifying in the articles of incorporation that directors will not be liable for willful negligence.
• D) a and b
• E) b and c

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Definitions:

Payments

Transactions or transfers of money that are made to settle a debt or an account.

Double-Entry Bookkeeping System

A method of accounting where every transaction is recorded in at least two accounts, with one account being debited and another credited, ensuring the accounting equation balances.

Single-Entry System

An accounting method where each financial transaction is recorded with only one entry, making it simpler but less detailed than double-entry systems.

Accounting Program

An educational curriculum designed to prepare students for careers in financial reporting, auditing, tax, and management accounting.