Setting the Protection of the Corporation Aside for Litigation Purposes,and

question 21

Multiple Choice

Setting the protection of the corporation aside for litigation purposes,and imposing liability on individual shareholders or entities that exist behind the corporation is called _____.

• A)ultra vires
• B)piercing the corporate veil
• C)strict foreclosure
• D)renunciation of a corporation
• E)takingover

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Definitions:

Consolidation Purposes

The process of combining financial statements of separate business entities within a group for reporting as one entity.

Unrelated Party

A party or entity that does not have a familial, business, or financial relationship with another party, ensuring transactions are conducted at arm's length.

Straight-Line Method

A method of calculating depreciation of an asset whereby the cost is evenly distributed over its useful life, resulting in a constant annual depreciation expense.

Consolidated Financial Statements

Financial reports that aggregate the financial position and operating results of a parent company and its subsidiaries, presenting them as a single economic entity.