Where a Director's Acts Are in Violation of His Duty

question 23

Multiple Choice

Where a director's acts are in violation of his duty of loyalty to the corporation, the most likely principle to be applied is the

• A) doctrine of ultra vires.
• B) doctrine of constructive notice.
• C) doctrine of corporate opportunity.
• D) doctrine of derivative action.

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Definitions:

Credit

An accounting entry that increases the balance of liabilities and equity accounts, and decreases the balance of an asset or expense account.

Rent Expense

The cost incurred for renting a property or equipment, recognized as an expense on the income statement.

Debit Cash

An accounting entry that increases the cash balance in a company's books, indicating inflows of money or equivalent.

Credit Cash

An accounting entry that decreases the cash balance in the company’s books, often as a result of paying out cash for expenses or liabilities.