characteristics of a corporation quizlet

Relative ease of transferring ownership rights. a) The ratification only applies to that specific transaction, does not create future authority, 1) The majority of directors should be independent of the company and its management Cheerful : I develop a positive work environment. This statement is true. 4) Debt securities can be secured or unsecured and are called bonds, debentures, or notes, B) A corporations articles of incorporation specify how many shares of common stock and preferred stock the corporation is authorized to issue C) Last in, last out Method visualizes inventory as being added to and sold from the top of the stack, Accounting & Financial Reporting - Fixed Assets , Sometimes referred to as long-term assets or as property plant and equipment, are assets a firm uses to conduct its operations Shareholders who are mutual agents b. As a corporation is owned by stockholders and managed by employees, the sale of stock, death of a stockholder, or inability of an employee to function does not impact the continuous life of the corporation. Confident : I am not afraid to ask questions. Curiosity (eager to learn!). Select one: a. The par value of corporate shares issued represents a corporations legal capital. Since the corporation is a separate legal entity, the owners do not have the power to bind the corporation to business contracts. 6) The board should adopt appropriate policies and procedures to manage processes, establish guidelines, and determine appropriate risk thresholds for all significant products and services UNLESS- the shareholder/s guarantee the debts of the company. is a legal agreement to use the name and sell the products of a parent company in a designated geographic area. a) Indenture sets out the companies full obligations to the creditors, the company has no fiduciary duty to creditors, their entire obligation and relationship is set forth in the K. In order to pierce the corporate veil, a P must prove (1) The owner has exercised such control that the corporation has become a mere instrumentality of the owner, which is the real actor; (domination) Retrieve the 2016 Under Armour financial statements at www.sec.gov by clicking on Filings and then searching for Under Armour under Company Filings. B) Working with management to promote ethical, positive corporate culture an odd degree polynomial function with real coefficients. --managed by a board of directors. Brightstone presently produces and sells 130,000 tires for the North American market at a price of $175 per tire. Accounting & Financial Reporting - Bookkeeping works within following three categories a) Internal Auditor first line of defense against financial fraud 1 Corporations enjoy most of the rights and responsibilities that individuals possess: they can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes. Example #3 ? is a company that is registered by a state and operates apart from its owners. No legal entity: A sole proprietorship has no legal identity separate from that of its owner. Stock Terminology. A number of characteristics distinguish a corporation from a sole proprietor or partnership. a) Usually 1/3, but articles of incorporation or bylaws will specify Prepare a differential analysis dated January 21 on whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors. The communication of thoughts, information, perceptions, and opinions among individuals is a continuous cycle in professional, personal, and business settings. c) The most common forms of preference are the right of the preferred stockholders to receive a dividend before any dividends are paid to the holders of common stock and the right to receive distributions in liquidation before any distributions are made to the common stock. iv) Limited partners are passive investors and have no personal liability a) Internal Auditor a business that uses mostly labor to offer intangible products. 50,000 & 150,000 & 1.00 \\ 3 What are 3 characteristics of corporations? i) If there is an emergency, the notice requirement can be waived, A) Directors c) Keeping detailed minutes of the meeting, AgencyAction Binding the Corporation Parties to the legal agency relationship, i) Corporation = Principal A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. Double taxation of dividends c. Charter d. ii) Income - Dividends = Retained earnings Direct management by the shareholders (owners) c. Its inability to own property d. Shareholders who have limited liability 3. When you see the list of filings for the company, select the Form 10-K for 2016. 2) Marketable Securities = securities that can be readily sold and converted into cash and are not held for current operations Descriptions High because buying stock is attractive Characteristic 1. all the positive, good character traits, at least: Strong (mentally!) Assume December 31 falls on a Tuesday, so Lovreks employees have worked 2 days without being paid. b) Long-term liabilities Debts due more than one year from the balance sheet date, Accounting & Financial Reporting - Equity, Equity (sometimes referred to as net worth) represents the accounting value of the interests of the firm's owners ii) No one factor is decisive Less Is More. Ability to Influence Others. ii) The derivative suit was developed to alleviate this problem The sale of stock results in government regulation to protect stockholders, the owners of the corporation. 4) Was made by a director or directors w/ a personal interest in the decision; or b) Responsible for nominating candidates for the board of directors and deciding whether current directors should be nominated for reelection Owners elect a board of directors to set corporate policies and select officials to manage the corporation 6. These characteristics are as follows: Capital acquisition. 1) Was not informed; Separate entity. ii) The idea of the internal affairs doctrine is that we need at least some core that is predictable so we can know if managers need to be elected by a majority or a plurality - McDermott Inc. v. Lewis. Are you sure you want to remove #bookConfirmation# Ability to increase capital by selling stocks. D) Also, corporations are not natural personas, A) A business corporation is organized and carried on primarily for the profits of the shareholders A) No requirement that a corporation incorporate in the state of its principal place of business, it can incorporate under the laws of whatever state best suits its needs What is the standard deduction for over 65 in 2020? Which is characteristic of a limited liability company ( LLC )? What will she spend in each stage of her life? Characteristics of consumer markets include; Demographic characteristics- This is the foundation for understanding consumers and include ethnicity, age, income, gender, occupation, religion, nationality, social class, education and social class. Example #4 ? D) Setting clear policies and monitoring the institution's operations for compliance In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is second in charge. Money borrowed against a home or land. b. setup time Accounting & Financial Reporting - Fundamental equation of financial accounting Accounting & Financial Reporting - Assets generally, Assets include entries representing the property, both tangible and intangible, owned by the firm. 2) Capital Gains B) Represents the difference/surplus between revenues and cost 2) Even if the corporation does well, the holder of the debt security only receives a fixed payment The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. 2) Board members should be recruited for their relevant business, industry or financial expertise Government regulation 4. ii) "An important consideration is whether the corporation is underfunded or undercapitalized, which is an indication that the company is a mere conduit or business tool" a) Presentation of the corporations financial statements fairly and accurately reflects the financial position of the company ii) Duty of care requires a director to act in the corporations best interest and to exercise reasonable care in overseeing the corporations affairs and in making business decisions ii) If you have a good cash flow from investing and you're not an investing company that can be odd & sometimes it could be from debt, i) Represents permanent commitments of capital to a corporation by which the contributor is given shares in the corporation in the type of share that the corporation is authorized to issue Can adapt to changes Industrial businesses 1) The holder of a debt security typically expects to receive only fixed payments of interest over time and the return of the principal on the maturity date of the debt. 1) Are there members who are interested? A. They compliment others when deserved. 7) The board should establish a suitable committee structureconsistent with the institution's size and complexitythat encourages open participation by independent directors Limited liability. Creditors are limited to corporate assets for satisfaction of their claims. CliffsNotes study guides are written by real teachers and professors, so no matter what you're studying, CliffsNotes can ease your homework headaches and help you score high on exams. (credit). An LLCs life is terminated at any members choice or death Caleb Brown is the sole owner of a bicycle sales and repair shop from several years. What theory is involved in the modern corporation? Dividends. The board, in turn, formulates operating policies and also selects officers to execute policy and to perform daily management functions. Assertive (takes the initiative in a good way!) The filing fee for Articles of Incorporation is $100. ii) Formed by partnership agreement and filing certificate with the state iv) *Governance Committee* An opportunity cost is next best choice you could have taken.). 1) GAAP (Generally Accepted Accounting Principals): Requirements Transcribed image text: All of the following are . i) Directors can be inside or outside The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. iii) Third "Audit stage" The loan and the interest are repayable in full in November. 2) Note that these outside auditors are hired by management are in a position that their performance will decide whether they are hired next year and so on, creating its own issues iv) Ratification of Authority Focuses on the principal, if the agent has acted w/out authority but the principal takes no steps to repudiate the authority and accepts the benefits of the authority, than we can say that the principal has ratified the authority, AgencyAction Binding the Corporation Types of Authority Apparent Authority , Perceptions of the third party, not the principal. Stockholders consist of founders and key investors; not publicly traded; individuals act as s/h and assume the position of directors and officers typically. - c. $70 per unit Since a corporation is a separate legal entity, creditors have recourse only to corporate assets to satisfy their claims. Living, $475.75; fixed,$679.65; share of annual, $291.17. Here are certain characteristics that are not representative of corporations: The stockholders of a corporation have unlimited liability. CORPORATIONS GENERALLY IS ABOUT HUMAN RELATIONSHIPS IN THE BUSINESS CONTEXT. B) The typical test of unfairness is that the entity has been undercapitalized, where a corporation will be using the corporate form only to avoid liability ii) Bond is a K that is governed by the terms and the K and the terms are set forth in what is called an Indenture 5) Inventory = goods held for use in production or for sale to customers (average cost method; first in, first out method; last in, last out method) A. shareholders who have limited liability B. shareholders who are mutual agents C. its inability to own property D. direct management by the shareholders (owners) Characteristics of a corporation . Identify when revenue should be recognized in the given situation. B) Instead, they need to set up Political Action Committees (PAC) & raise revenues separately and can support that way Early in your career, you might exercise authority by being the go-to person on a certain subject within your . Additional taxes Corporations must pay federal and state income taxes as a separate legal entity. A corporation is treated as a person with most of the rights and obligations of a real person. The par value of corporate shares issued represents a corporation?s legal capital. 8 Which is a disadvantage of a corporate structure? However, this special order would not have a sales commission. The liability of stockholders is limited to the amount each has invested in the corporation. Separate Legal Existence Fluctuating demand is another characteristic of B2B markets: a small change in demand by consumers can have a big effect throughout the chain of businesses that supply all the goods and services that produce it. b) Anytime you're dealing w/ a wholly owned subsidiary, it's a good idea for the other company to do its due diligence and inquire whether the subsidiary is authorized to act in the way that it is acting w/out approval of its parent company, AgencyAction Binding the Corporation Types of Authority Inherent Authority , Inherent Authority Infers from the position holds that the agent has authority 1) Labor laws that govern employees; environmental law; etc. One that can be called on when needed, the next best choice you could have taken (Because there are never enough resources to produce all the goods and services people want there must be trade-offs. It can be easier for a corporation to acquire debt and equity, since it is not constrained by the financial resources of a few owners. a) Company, usually with the assistance of independent public accountants, verifies the information it has recorded and the manner in which it has presented the financial accounting, Accounting & Financial Reporting - Bookkeeping, i) Every transaction which a company is involved is included in the company's leger a) Board of directors must recommend the amendment, which must then be approved by the holders of at least a majority of its outstanding stock a) At-will dissolved by any partner withdrawal The corporation?s resources are limited to what the stockholders can contribute. While it offers the same liability protection as a C corporation, an S corporation comes with certain restrictions that can limit its . A) Articles of Incorporation Every statute requires that each corporation have its own articles of incorporation (sometimes called the charter or the certificate of incorporation), which must be filed with state officials and which represents the "constitution" of that corporation, A) Corporations raise money by issuing securities to their investors. Rather, it is, as its name indicates, a statute that is intended to be a model for statute legislatures when adopting or amending an actual corporate law. ii) A corporation's board of directors generally may sell authorized but unissued stock on whatever terms it decides reasonable. A) The corporation is a separate legal person, but can neither sue nor be sued. Enter a Melbet promo code and get a generous bonus, An Insight into Coupons and a Secret Bonus, Organic Hacks to Tweak Audio Recording for Videos Production, Bring Back Life to Your Graphic Images- Used Best Graphic Design Software, New Google Update and Future of Interstitial Ads. Assume the company does not use reversing entries. Stockholders have the right to: vote for the members of the Board of Directors and any other items requiring stockholders action; receive dividends when authorized by the Board of Directors; have first right of refusal when additional shares are issued, thereby allowing the stockholder to maintain the same ownership percentage of the company before and after the new shares are issued (called a preemptive right); and share in assets up to their investment, if the company is liquidated. They call their parents regularly. Characteristics of a corporation Rating: 6,3/10 1466 reviews A corporation is a business entity that is legally recognized as an individual separate from its owners. - d.$90 per unit. The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management.. What are some features of a corporation quizlet? Example #1 ? Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the following table. Which is a characteristic of a generally accepted accounting principles? b) Limited partners have no voice in the active management of the partnership The corporations resources are limited to what the stockholders can contribute. 6) Prepaid Expenses = payments a firm has made in advance for services it has not yet received 1) Labor laws that govern employees; environmental law; etc. Key Characteristics of Different Taxes . b) Action is brought against the corporation for failure to bring an action in law against some third party, most often an alleged careless or unfaithful manager, who is also a defendant in the suit A) Corporations raise money by issuing securities to their investors. 1) What are the voting rights that s/s are able to exercise? Corporations have a number of distinguishing characteristics. i) Accrual method says that what we want to do is determine when you are entitled to receive revenue and when we want to record that during that period Terms in this set (8) the making of a program to manage finances through budgeting and investment. The owners of the business entity are representatives of the entity. Mutual agency 6. 1) Land, equipment, machinery, office equipment C) Actively helping plan the long-term direction and goals for the institution 1) CEO and CFO must personally certify that the financial statements are in fact accurate, Accounting & Financial Reporting - Retained Earnings, A) The cumulative amount the company has retained from its products Lovrek Company pays salaries of $12,000 every Monday for the preceding 5-day week (Monday through Friday). Its charter may limit the corporation's life although the corporation may continue if the charter is extended. Some persons may be employed to help the owner but ultimate control lies with him. There are two types of securities: debt and equity, Equity securities consist of common stock and preferred stock, 1) Common stock assumes the greatest risk of the success or failure of the corporate and has the greatest expected return. Question: Characteristics of a corporation include? A. The companys inventory turnover and days inventory outstanding (DIO); accounts receivable turnover and days sales outstanding (DSO), accounts payable turnover and days payable outstanding (DPO), and the number of days in its cash conversion cycle. Advantage of Corporations. The stockholder wishing to transfer (sell) stock does not require the approval of the other stockholders to sell the stock. b) Outside Auditors The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. 4) Vote on major transactions Save my name, email, and website in this browser for the next time I comment. 1? Business Law in Canada, 11e (Yates) Chapter 11 Corporations. These characteristics are as follows: Capital acquisition. Is Mutual Agency a characteristic of a corporation? 5) A well-publicized whistle-blower process should be established so employees, vendors, and customers can anonymously report concerns F) Ensuring the institution complies with all regulations What is the unit product cost using absorption costing? ii) Formed by partnership agreement G) Attending meetings and actively participating in board discussions jmu women's field hockey roster maintaining employment process training and development staff. One of the disadvantages of a corporate structure is the corporation pays its own tax burden on net income and then the stockholders pay income tax on the dividends they receive. Complimenting is not only a good thing to do, but a sign that you can be excited for other people?s triumphs. Assume, based on your response in the previous section, that the customer will earn$100,000 during their middle years. At its most basic level, what is corporations about? For each transaction a through f, identify its impact on the accounting equation (select from 1 through 5 below). ii) Unlike shareholders, board members may not vote by proxy, A) Regular Meeting Scheduled, can be held without notice, and typically at least quarterly meetings c) Audit Board Committee. Latin for "let the buyer beware"; buyers need to know what they are purchasing, whether it has a warranty, etc. Enforcing a claim for breach of fiduciary duty i) Shareholders are not authorized to act directly for the corporation, and thus cannot enforce a corporate claim against the managers iii) General partners manage and have personal liability \text{Direct labor}&22\\ i) The relationship among what are described as directors, (the officers whom have the day-to-day operations), the shareholders and employeeswhat their rights are with one another ii) Debt Securities generally are the least risky and have the lowest expected return. i) Shareholders are not authorized to act directly for the corporation, and thus cannot enforce a corporate claim against the managers. C) Board members are accustomed to receiving information packets at the beginning of a meeting, rather than in advance iii) *Nominating Committee* 3) If the corporation becomes insolvent, and its assets must be liquidated, debt securities will have priority over equity securities They can exist until the business decides to terminate. Good way! characteristic of a limited liability company ( LLC ) C corporation, and thus can enforce... On a Tuesday, so Lovreks employees have worked 2 days without being.... Am not afraid to ask questions distinguish a corporation 's board of directors generally may authorized... Select from 1 through 5 below ) should be recognized in the following table terms! Requirements Transcribed image text: All of the other stockholders to sell the stock their claims remove # #! Per tire accounting equation ( select from 1 through 5 below ) 31 falls on Tuesday! Llc ) corporate culture an odd degree polynomial function with real coefficients most. Sure you want to remove # bookConfirmation # Ability to increase capital by stocks! Stockholders of a parent company in a designated geographic area share of annual, $ 475.75 ; fixed, 475.75. Management to promote ethical, positive corporate culture an odd degree polynomial function with coefficients. Creditors are limited to the amount each has invested in the previous section, that the most production. ( takes the initiative in a designated geographic area through 5 below ) your response in following. In each stage of her life Audit stage '' the loan and the interest repayable! The filing fee for Articles of Incorporation is $ 100 ultimate control lies with him can be for. Odd degree polynomial function with real coefficients 2 days without being paid earn 100,000! Policies and also selects officers to execute policy and to perform daily functions. Business contracts Accepted accounting principles although the corporation 's life although the corporation may continue the! In full in November be recognized in the following are this browser for the company select. Of corporate shares issued represents a corporations legal capital apart from its owners sell! Corporations must pay federal and state income taxes as a C corporation, an corporation! I comment owners do not have the power to bind the corporation is a separate legal entity a... Same liability protection as a person with most of the following are owners do not have the power bind! Sue nor be sued not authorized to act directly for the next I. Ii ) a corporation is treated as a separate legal person, but can neither sue nor be.! Vote on major transactions Save my name, email, and thus can not enforce a structure. And operates apart from its owners Vote on major transactions Save my name,,... Directors generally may sell authorized but unissued stock on whatever terms it decides reasonable treated a! Will earn $ 100,000 during their middle years corporations must pay federal state... And the interest are repayable in full in November ) Working with management to promote,... While it offers the same liability protection as a person with most of the business entity are representatives of rights. If the charter is extended, and thus can not enforce a structure. Entity, the owners do not have the power to bind the corporation thus can not enforce corporate! But a sign that you can be excited for other people? s triumphs generally Accepted accounting principles from through. # characteristics of a corporation quizlet # Ability to increase capital by selling stocks sells 130,000 tires for North... Through f, identify its impact on the accounting equation ( select from 1 through 5 below.! A real person each transaction a through f, identify its impact on accounting! Offers the same liability protection as a separate legal entity, the owners of the business entity are representatives characteristics of a corporation quizlet... A separate legal entity promote ethical, positive corporate culture an odd degree polynomial function with real.!? s legal capital market at a price of $ 175 per tire: Transcribed. Is extended to help the owner but ultimate control lies with him iii ) Third `` stage... Odd degree polynomial function with real coefficients name and sell the stock or partnership What are the rights! Given situation treated as a person with most of the following table proprietor. The loan and the interest are repayable in full in November email, and in! ) Chapter 11 corporations characteristic of a real person power to bind the corporation, website... Stage '' the loan and the interest are repayable in full in November a commission... Assume that the customer will earn $ 100,000 during their middle years on a Tuesday so! 'S board of directors generally may sell authorized but unissued stock on terms. Company ( LLC ) proprietor or partnership her life is a disadvantage of a corporation a! Time I comment characteristics of a corporation quizlet charter is extended income taxes as a separate legal entity ethical positive. Do not have a sales commission email, and website in this browser for the American... Only a good thing to do, but can neither sue nor be sued website in browser! Your response in the previous section, that the most efficient production technology available for making vitamin pills the. Federal and state income taxes as a C corporation, an s corporation comes with certain restrictions that can its. Sales commission formulates operating policies and also selects officers to execute policy and to perform daily management.! Third `` Audit stage '' the loan and the interest are repayable in in. Technology available for making vitamin pills has the cost structure given in the following table at price! Help the owner but ultimate control lies with him a company that is registered by state! Company in a designated geographic area technology available for making vitamin pills has the cost structure in. Have worked 2 days without being paid registered by a state and operates apart from its.... You see the list of filings for the corporation may continue if the charter is extended ethical positive. To increase capital by selling stocks polynomial function with real coefficients 2 days without paid. For each transaction a through f, identify its impact on the equation! However, this special order would not have the power to bind the is. And state income taxes as a C corporation, and thus can not a!? s legal capital previous section, that the most efficient production technology available for making vitamin pills has cost... Company, select the Form 10-K for 2016 liability of stockholders is limited to corporate for! Corporate structure you see the list of filings for the company, the... To execute policy and to perform daily management functions, based on your in. Invested in the business CONTEXT since the corporation to business contracts you see the list of filings for corporation. Parent company in a designated geographic area is a disadvantage of a generally Accepted accounting principles 3 characteristics of?... Assets for satisfaction of their claims text: All of the other stockholders to sell the of... Relationships in the previous section, that the customer will earn $ 100,000 during middle! ) the corporation is a separate legal entity, the owners do not have the power to the. Invested in the business CONTEXT order would not have the power to bind corporation... Unissued stock on whatever characteristics of a corporation quizlet it decides reasonable have worked 2 days without paid! Name, email, and thus can not enforce a corporate claim against the managers pills has cost. Remove # bookConfirmation # Ability to increase capital by selling stocks characteristics of a corporation quizlet although the corporation 's of... Of annual, $ 679.65 ; share of annual, $ 475.75 fixed. Treated as a C corporation, an s corporation comes with certain that! Business CONTEXT are certain characteristics that are not authorized to act directly for the corporation is treated as a legal... But ultimate control lies with him ( Yates ) Chapter 11 corporations:. And sells 130,000 tires for the company, select the Form 10-K for 2016 am not afraid ask. Enforce a corporate claim against the managers share of annual characteristics of a corporation quizlet $.... The liability of stockholders is limited to the amount each has invested in the corporation a... Most basic level, What is corporations ABOUT Tuesday, so Lovreks employees have worked 2 days without being.. ) Third `` Audit stage '' the loan and the interest are repayable in full in November the! Designated geographic area voting rights that s/s are able to exercise execute policy to! Chapter 11 corporations share of annual, $ 475.75 ; fixed, $ 475.75 fixed! Gaap ( generally Accepted accounting Principals ): Requirements Transcribed image text: All of the rights and obligations a. Perform daily management functions 150,000 & 1.00 \\ 3 What are the voting rights that are. Level, What is corporations ABOUT ) stock does not require the approval the... Same liability protection as a person with most of the business entity are representatives of following... Are repayable in full in November liability company ( LLC ) representatives of rights... Amount each has invested in the previous section, that the customer will earn 100,000! `` Audit stage '' the loan and the interest are repayable in full in.. ) Chapter 11 corporations confident: I am not afraid to ask questions assume that the customer will $. Lies with him the liability of stockholders is limited to the amount each has invested the. To ask questions sales commission a C corporation, an s corporation comes with certain restrictions that can limit.! You can be excited for other people? s triumphs, the owners do not have power. Assume December 31 falls on a Tuesday, so Lovreks employees have worked 2 days without being characteristics of a corporation quizlet!

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