Amy Is on the Board of Directors of Computers Plus

question 16

Multiple Choice

Amy is on the board of directors of Computers Plus.Computers Plus is looking for a warehouse to purchase.Amy owns a warehouse.In order for Amy to sell her warehouse to Computers Plus,

• A)the transaction must be fair to both Amy and Computers Plus.
• B)the disinterested members of the board of directors must approve the transaction.
• C)she must resign her position on the board of directors of Computers Plus before any negotiations for the warehouse begin.
• D)a court must review the opportunity to determine its favorability.

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Definitions:

End-Of-Period Spreadsheet

A tool used in accounting to gather all account balances at the end of an accounting period to prepare financial statements.

Dividends

Money paid out to shareholders by a business, generally coming from the business's profits.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Retained Earnings

The portion of net income that is not distributed to shareholders but is kept by the company for reinvestment or debt payment.