Which of the Following Is True Regarding Situations in Which

question 28

Multiple Choice

Which of the following is true regarding situations in which a court may order an involuntary dissolution of a corporation?

• A) A court may order an involuntary dissolution of a corporation under the following four circumstances: when the corporation has failed to show a profit for over two years, when the corporation obtained its article of incorporation fraudulently, when the directors have abused their power, and when the corporation is insolvent.
• B) A court may order an involuntary dissolution of a corporation under the following three circumstances: when the corporation obtained its article of incorporation fraudulently, when the directors have abused their power, and when the corporation is insolvent.
• C) A court may order an involuntary dissolution of a corporation under the following three circumstances: when the corporation has failed to show a profit for over two years, when the corporation obtained its article of incorporation fraudulently, and when the directors have abused their power.
• D) A court may order an involuntary dissolution of a corporation under the following three circumstances: when the corporation has failed to show a profit for over two years, when the corporation obtained its article of incorporation fraudulently, and when the corporation is insolvent.
• E) A court may only order an involuntary dissolution of a corporation when the corporation is insolvent.

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Definitions:

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a debit to the sales returns account and a credit to accounts receivable or cash.

Gross Sales

The gross sales income of a business before subtracting any returns, allowances, or discounts.

Credit Sales

Sales transactions where payment is not received at the time of purchase but is instead deferred to a later date.

Cash Sales

Transactions where goods or services are paid for with cash at the time of the sale.