Wild, Ken W. Shaw, Financial Accounting: Information for Decisions, Just-in-time manufacturing philosophy reduces all of the following except A. 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 They call their parents regularly. Ownership is easily transferred through sale of stock 4. These characteristics are as follows: Capital acquisition. B) Cash flow just makes certain type of adjustments as to which components of the statement reflect where cash is going in and going out 5) Was made by a director or directors who otherwise were not independent 2) Preferred stock sits between common stock and debt Hard worker 4. a) Company records in its books information concerning every transaction in which it's involved Clothing should always be clean and ironed properly. advantages of corporations, disadvantages of corporations, Ability to increase capital by selling stocks, No managerial skills needed from stockholders because decisions are made by the Board of Directors, Financial and Managerial Accounting: Information for Decisions, Barbara Chiappetta, John J. ii) Formed by partnership agreement Exxon Mobil. 100,000 & 275,500 & 3.00 b) If one of two innocent parties must suffer due to betrayal of trusteither the principal or the third partythe loss should fall on the party who is most at fault. Things you have to give up when you make a particular choice. to put money to use by buying a part of something, so that you may have profitable returns such as interest, or income. What is the nervous system tissue called? E) Packets provided to members don't contain pertinent information or are in a format that makes determining risk exposures and judging the effectiveness of risk management difficult Examples of personal positive qualities: kind, gentle, strong, resilient, caring, assertive, hard-working, reliable, honest, practical, responsible, loyal, mature, creative, consistent, appreciative, capable, quick, sensitive, perceptive, patient, thoughtful, fit, trustworthy, shows initiative, motivated, versatile. Stock Terminology. B) Instead, they need to set up Political Action Committees (PAC) & raise revenues separately and can support that way service business. 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. Tip. 1) If they find no irregularities they offer a "clean" opinion that it represents fairly in all material aspects Publicly held companies with stock traded on exchanges are required to file their financial statements and additional informative disclosures with the Securities and Exchange Commission. Separate taxable entity (leading to double taxation) 7. 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. \end{array} Government regulation 4. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. caveat venditor. 2) If yes Are all other directors independent of that interested party? No managerial skills needed from stockholders because decisions are made by the Board of Directors. Money borrowed against a home or land. E) Knowing where the institution stands and staying abreast of its financial health Identify when revenue should be recognized in the given situation. Brightstone pays a selling commission equal to 5\% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. Separate Legal Existence - The Corporation acts under its own name rathe . An entrepreneur is someone who attempts to earn money and make profits by taking the risk of owning and operating their business. Ability to raise large capital amounts 2. a) Appears on the right side of the balance sheet b/c it may be considered as the amount that is "owed" to the stockholders, Accounting & Financial Reporting - Financial statements are produced through a 3-stage process, i) First "Recording and controls" stage This statement is true. Often, a bullwhip type of effect occurs. 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 number of characteristics distinguish a corporation from a sole proprietor or partnership. b. i) Like the alter ego doctrine, the single business enterprise doctrine is an equitable remedy, which applies when the corporate form is "used as part of an unfair device to achieve an inequitable result" Corporation Has. If you already know that you need a logo for your business, you can use our logo maker to help you create a strong one. 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. Often secured by property. ability of profit-making organizations to compete with businesses in other countries effectiveness making the right decisions about what products or services to offer customers and how to produce and deliver them efficiency producing needed goods or services quickly and at a low cost domestic goods products made by firms in the United States An opportunity cost is next best choice you could have taken.). i) If you have a good cash flow from operating activities you have a health business Type of Tax Description Advantages Disadvantages Direct Taxes Personal income tax (time and money).Tax levied on incomes/wages/earnings Progressive - use a marginal tax rate that increases as the amount of taxable income increases, thus effective in income distribution. A corporation is subject to numerous state and federal regulations. Memorable. \text{Direct labor}&22\\ Upon conversion of all the bonds, Bridgewater Corp. recorded the$160,000 premium as a reduction of paid-in capital. Capital acquisition. 1) Analysts typically like a 2:1 ratio, this suggests you have enough cushion to pay your bills as they become due The investors vote on the Board of Directors who are responsible for hiring management. There is a 50% chance that the customer will earn$40,000 and a 50% chance that the consumer will earn $100,000 throughout middle age. Separation of owners and entity (no mutual agency). The communication of thoughts, information, perceptions, and opinions among individuals is a continuous cycle in professional, personal, and business settings. vi) No member liability C. The title of the corporation is limited by the death of the owner Which of the following is a characteristic of a limited liability company (LLC)? What is the difference between Hardie board and Hardie plank? 6) Amend the Bylaws, Warrant gives the creditor the option to buy the stock by a particular time, for a particular price, and when this is exercise the corporation has to issue additional stock to cover the obligation, i) A bond is a loan to the company for a fixed period of time A corporation is treated as a person with most of the rights and obligations of a real person. a. inventory iii) *Nominating Committee* The filing fee for Articles of Incorporation is $100. a) Assets are values at what is called their "historical cost," which is what the company paid for them, not what they are currently worth, Accounting & Financial Reporting - Current assets , Include cash and other assets which in the normal course of business will be converted into cash in the reasonably near future Stockholders consist of founders and key investors; not publicly traded; individuals act as s/h and assume the position of directors and officers typically. 6) Prepaid Expenses = payments a firm has made in advance for services it has not yet received --owned by shareholders. Par. v) Personal liability These taxes are substantial; they can amount to more than 40% of taxable income, may have thousands of stockholders, and its stock is traded on a national securities exchange. Latin for "let the buyer beware"; buyers need to know what they are purchasing, whether it has a warranty, etc. Characteristics of an Effective Leader. b) Responsible for nominating candidates for the board of directors and deciding whether current directors should be nominated for reelection Determine another student's ideal beliefs and the significance of those beliefs for a spa. In a corporation, one stockholder cannot jeopardize other stockholders through poor decision making. traits, like being honest, respectful, responsible, caring, fair. Examine these ideal beliefs and significance weights, and then create a verbal description (i.e., concept) of a new brand for these items that would satisfy this student's needs. Did these ratios get stronger or weaker in 2016 compared to 2015? B) Revenues and expenses are recorded on an accrued basis rather than a cash basis If you continue to use this site we will assume that you are happy with it. 1) GAAP (Generally Accepted Accounting Principals): $$ is the process of starting and managing your own business. State laws usually include the requirements for issuing stock and distributions to stockholders. A corporation is treated as a "person" with most of the rights and obligations of a real person. 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 a) Presentation of the corporations financial statements fairly and accurately reflects the financial position of the company a) There is a maturity date where you have to pay back to the principal and there is always annual interest lego 41446 friends heartlake city vet clinic. Who is the most powerful person in a corporation? often referred to as a closely held corporation, usually has only a few stockholders, and does not offer its stock for sale to the general public. (d) You borrow money in August from RBC Financial Group. What will she spend in each stage of her life? Corporations must pay federal and state income taxes as a separate legal entity. Transferability of ownership Readily transferred 4. (3) The fraud or wrong results in an unjust loss or injury to the P. Piercing the Corporate Veil general overview -- advantages, etc. In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is second in charge. Competitive: I thrive under pressure. Since the corporation is a separate legal entity, the owners do not have the power to bind the corporation to business contracts. Example #7 ? iii) Officers = Agent/Principal Separate entity. What are the 4 attributes of corporation? Amazon was founded in 1994 and is a world leader in e-commerce. c) When sold, they are authorized and issued or authorized and outstanding Your email address will not be published. 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 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 iv) Limited partners are passive investors and have no personal liability All corporations are owned by groups of investors. We use cookies to ensure that we give you the best experience on our website. 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