You Have Been Asked by Two Fellow Graduates to Join

question 149

Multiple Choice

You have been asked by two fellow graduates to join them in incorporating a closely held corporation that would commence a consulting business.One was in your class,so you know him quite well,but the other is graduating from a different school.You have been discussing the law to review the protection it gives you.Read each of the following statements separately and indicate which is true.

• A)If you have pre-emptive rights and the directors decide to issue a new allotment of shares,the corporation must offer you a portion of the new issue to allow you to keep your proportional share of the corporation.
• B)A shareholder's agreement allows shareholders and not officers to manage the corporation.
• C)As a shareholder,you will have the right to vote for the officers of the corporation.
• D)If you were voted out as a director by the others,who could show that it was in the best interest of the corporation,you could sell your shares to any interested buyer without interference from the other directors.
• E)If you each take one-third of the first allotment of the shares,you will necessarily be a minority shareholder,and have no voting rights in electing the directors of the corporation.

Identify the types of users of financial information and the purpose of various financial statements.

Recognize the difference between expenses and assets, and their impact on financial statements.

Understand the process and significance of recording revenues and expenses.

Distinguish between internal and external users of accounting information and their specific needs.

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Definitions:

Void

A keyword used in programming languages to indicate that a method does not return any value.

BaseRadius

Typically refers to a property or variable used to denote the radius of a base in geometric shapes or structures.

Height

Height refers to the measurement of an object or individual from base to top or from the ground to its highest point.

Cylinder

A geometric solid that is bounded by a circular base, a congruent parallel top, and a curved surface that connects the two circles.