Solution: The ability of a corporation to obtain capital is
Correct Option is enhanced because of limited liability and ease of share transferability.
Explanation: As the corporations have limited liability, the personal property of the shareholders cannot be attached by the court to repay the debts of the company. Also, it becomes easy for the share holders to transfer their shares by selling them on a stock exchange.
The above benefits are not enjoyed by a partnership firm as in case of partnership firms, the liability of the partners is unlimited and also the shares are not freely transferable.
Multiple Choice Question 55 The ability of a corporation to obtain capital is enhanced because of...
These are all multiple choice questions. I need your help, and I need them for tonight. Please... Thank you ? We were unable to transcribe this imageMultiple Choice Question 136 When admitting a new partner by investment, a bonus to old partners is sometimes justified because goodwill may exist and it is not reflected in the accounts. is usually unjustified because book values clearly reflect partnership net worth. results if the debit to cash is equal to the new partner's...
The advantages of the partnership form of business organization, compared to corporations, include Multiple Choice Single taxation. Ease of raising capital. Mutual agency. Limited liability. Difficulty of formation.
What type of legal entity do many entrepreneurs use and why? Multiple Choice Sole Proprietorships due to the ease of initially setting up an organization. C Corporation due to its accounting system and financial reporting information. C Corporation due to its ability to finance with both debt and stock. LLC due to its tax advantages and the limited liability aspect to owners.
Multiple Choice Question 136 When admitting a new partner by investment, a bonus to old partners is sometimes justified because goodwill may exist and it is not reflected in the accounts. is usually unjustified because book values clearly reflect partnership net worth. results if the debit to cash is equal to the new partner's capital credit. results if the debit to cash is less than the new partner's capital credit. O
A sole proprietorship: Multiple Choice can generally raise significant capital from non-owner sources. involves significant legal costs during the formation process. provides limited financial liability for its owner has its profits taxed as personal income. has an unlimited life.
Which of the following statements is CORRECT? a. Due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of U.S. businesses (in terms of number of businesses) are organized as corporations. b. Large corporations are taxed more favorably than proprietorships. c. Corporate stockholders are exposed to unlimited liability. d. Most businesses (by number and total dollar sales) are organized as proprietorships or partnerships because it is easier to set up and operate one of these forms...
Ernie and Bert agree to form a partnership. Because the two are great friends, no written partnership agreement is made. Ernie agrees to contribute $100,000 in assets and to devote half of his time to the partnership. Bert is to contribute $40,000 in assets and to devote all of his time to running the operations of the partnership. Ernie and Bert will divide any net income or net loss in the following ratio (respectively): O 5:2 10:4 O 1:1 O...
Multiple Choice Question 148 On November 30, capital balances are Ross $295000, Ellis $256000 and Gise $256000. The income ratios are 15%, 15% and 70%, respectively. Ross decides to retire from the partnership. In order for Ellis and Gise to have equal capital interests after the retirement of Ross, how much partnership cash would have to be paid to Ross for her partnership interest? $295000 $0 Any amount paid to Ross will cause Ellis and Gise to still have equal...
For question #4 accurately answer each of the following: Ch 01: Assignment-An Overview of Financial Management Businesses can be classified into the following forms: proprietorship, partnership, corporation, limited liability company (LLC), and limited liability partnership (LLP). Different forms of businesses have different characteristics. Which of the following characteristics belong to a proprietorship? Check all that apply. Profits taxed only once, at the individual (personal) level can easily raise large amounts of capital Subject to unlimited liability You see and read...
Multiple Choice Question 107 Sheffield Corporation issues 10100 shares of $50 par value preferred stock for cash at $75 per share. The entry to record the transaction wil consist of a debit to Cash for $757500 and a credit or credits to Preferred Stock for $505000 and Paid-in Capital in Excess of Par-Preferred Stock for $252500 Preferred Stock for $252500 and Paid-in Capital from Preferred Stock for $505000 Preferred Stock for $757500 Paid-in Capital from Preferred Stock for $757500 Click...