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 3) If the corporation becomes insolvent, and its assets must be liquidated, debt securities will have priority over equity securities Relative ease of transferring ownership rights. 1. a) There is a maturity date where you have to pay back to the principal and there is always annual interest from your Reading List will also remove any 5) Vote to amend to Articles Owner liability 8. Curiosity (eager to learn!). Example #1 ? What are 2 characteristics of a corporation? ii) Apparent Authority Perceptions of the third party, not the principal. A) Waste only is "what the corporation has received is so inadequate in value that no person of ordinary, sound business judgment would deem it worth that which the corporation has paid" These taxes are substantial; they can amount to more than 40% of taxable income publicly held corporation Brightstone is evaluating a special order from a European automobile company, Euro Motors, Euro is offering to buy 20,000 tires for$116 per tire. 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. J.P. Morgan Chase. iii) Perpetual life \text{Selling and administrative expenses (45\\\% variable)}&\underline{26}\\ ii) Board = Agent/Principal A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. c) When sold, they are authorized and issued or authorized and outstanding a) Must be comprised entirely of independent directors Mutual agency 6. Therefore, corporations may own property, enter into binding contracts, borrow money, sue and be sued, and pay taxes. caveat venditor. 8) The board, through its audit committee, should verify the institution's financial management strength and effectiveness through an annual external audit 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. Latin for "let the buyer beware"; buyers need to know what they are purchasing, whether it has a warranty, etc. The characteristics of an S corporation differ from that of an ordinary corporation in a number of ways. Influential leaders have a wide collection of skills, including self-confidence, reliability and honesty. (3) Intermingling of funds; 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) This statement is true. A. They remember their manners. Tip. b) Typically, preferred stockholders will receive a fixed dividend payment although the declaration of a preferred stock dividend is also at the discretion of the board of directors Continuous Life. What are 2 characteristics of a corporation? (Hint: The consumer will attempt to maintain constant consumption for her final two life periods as long as she can consume at least $20,000 in each period after she reaches middle age.). ". Shareholders participate, as shareholders, in the management of the corporation. Descriptions Characteristic 1. They are kind to everyone. 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? Similarly, a person or an entity wishing to purchase stock in a corporation does not require the approval of the corporation or its existing stockholders before purchasing the stock. I) Ensuring and maintaining the board's independence, Red Flags of Deficiency in Governance to Watch For, A) A strong or dominant CEO "runs the show," soliciting little or no input from others and not tolerating the opposing view Ownership is easily transferred through sale of stock 4. Is Ashford nationally or regionally accredited? By setting up a PAC only those who support the politician can give money Good people understand that others need praise. If you continue to use this site we will assume that you are happy with it. iii) *Nominating Committee* is someone who attempts to earn money and make profits by taking the risk of owning and operating their business. Ownership and management are vested in the same person. " [Leadership] is all about influencing people," said Kirstin Lynde, founder of leadership development firm Catalyze Associates, in a Facebook Live interview. Tax status of income Previous question Next question 2) A corporation is typically formed under the laws of a particular country, and is subject to the jurisdiction of the government in which it was created. ii) Under this rule, courts will defer to the judgment of the board of directors, absent highly unusual circumstances, such as conflict of interest or gross inattention However, this special order would not have a sales commission. Find the total monthly expenses. It may be established as a profit making or nonprofit organization and may be publicly or privately held. vi) Majority decision making, i) Partnership w/ general & limited partners a) You have been an employee of the company, or a family member has been an executive of the company 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. 6) Prepaid Expenses = payments a firm has made in advance for services it has not yet received (credit). Separate taxable entity (leading to double taxation) 7. The duty to provide the faith and confidence and the duty of care, loyalty and obedience i) Directors, officers and controlling shareholders owe a fiduciary duty to the corporation; and through the corporation to the shareholders B) Committees Boards delegate responsibilities to committees, who then have a certain amount of discretion with regard to their specific responsibilities, but they can't take action that would require s/h approval, can't fill vacancies on the board or on the committee, can't adopt/amend/repeal bylaws w/out full board approval. iv) Limited partners are passive investors and have no personal liability Less Is More. Cooperative : I get along well in a team setting. 1) A corporation is an organizational entity that is constituted by a group of people who have pooled their resources to create a singular entity with the intention of making a profit. How to Market Your Business with Webinars? B) With contract creditors, plaintiffs will have had every opportunity to get personal guarantees in the contracts, or to protect themselves in the event that funds were not available; whereas, with a tort, it kind of just happens and you can't prepare for it 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. They compliment others when deserved. Be sure to retrieve the 2016 financial statements, not another year. Corporations have an indefinite life. Duration of life 3. Transferable ownership rights. 8 Which is a disadvantage of a corporate structure? Ability to raise large amounts of capital High ability 5. "A business that is able to nurture the same . Owners elect a board of directors to set corporate policies and select officials to manage the corporation 6. 3) Accounts Receivable = amounts not yet collected from customers to whom goods have been shipped or services delivered 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. 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. C) Actively helping plan the long-term direction and goals for the institution B) *Single Business Enterprise Doctrine* States that when corporations are not operated as separate entities, but integrate their resources to achieve a common business purpose, each constituent corporation may be held liable for the debts incurred in pursuit of that business purpose Ability to Influence Others. 1) Labor laws that govern employees; environmental law; etc. How does the CPI differ from the MMPI? a) *Current ratio = Current Assets / Current Liabilities* 1) Dividends - d.$90 per unit. Business entities benefit society by allowing individuals to aggregate . What is the standard deduction for over 65 in 2020? A corporation is treated as a "person" with most of the rights and obligations of a real person. Google. 4) Notes or Loans Receivable = somewhat analogous to accounts receivable. Exxon Mobil. Amazon. People pool their money together to buy a variety of stocks. The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. Example #2 ? Transferability of ownership Readily transferred 4. Goal setter 6. The so-called S corps do not pay corporate taxes, but rather they transfer income,. b) Outside Auditors look at how things are recorded and for irregularities A shareholder's liability is limited to the amount he or she paid for the shares. Previous Are you sure you want to remove #bookConfirmation# A) Gives companies the general guidelines and requirements of how to do your financial statement, i.e., things that you have to do when making these reports The corporation is considered a separate legal entity, conducting business in its own name. 2 Which one of the following is not a characteristic of a corporation? B/C the principal puts the agent in a position of trust, the principal should bear the loss, AgencyAction Binding the Corporation Types of Authority 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 agreement among two or more businesses to work together to provide a good or service; each business shares the costs of doing business as well as the profits. Apple. B) Board members don't hold the CEO or management team accountable for actions or inactions The board, in turn, formulates operating policies and also selects officers to execute policy and to perform daily management functions. - c. $70 per unit Ability to increase capital by selling stocks. 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. Tip. These characteristics are as follows: Capital acquisition. ii) Where the corporate form is used as a shield behind which injustice is sought to be done by those who have control of it that equity penetrates the corporate veil, A) 141 says that the business and affairs of every corporation shall be managed by the board unless otherwise provided in the code, or in the certificate of incorporation Dividends. The stockholder wishing to transfer (sell) stock does not require the approval of the other stockholders to sell the stock. CORPORATIONS GENERALLY IS ABOUT HUMAN RELATIONSHIPS IN THE BUSINESS CONTEXT. a) Some companies have established this committee in recent years b) Be composed solely of independent directors Expert Answer. 4) Was made by a director or directors w/ a personal interest in the decision; or Required fields are marked *. 75,000 & 187,500 & 2.50 \\ (4) Overlap in ownership, officers, directors, and personnel; What is the unit product cost using absorption costing? 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)? Direct management by the shareholders (owners) c. Its inability to own property d. Shareholders who have limited liability 3. The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. When you see the list of filings for the company, select the Form 10-K for 2016. b) Limited partners have no voice in the active management of the partnership (8) Whether the corporations are treated as independent profit centers (big one); 2014 figures for the company are as follows (in thousands): Accounts receivable (net) $279,835; Inventories$536,714; Accounts payable $210,432. Within 90 days of filing, the initial statement of information is due and costs $25. i) Factors Duration of life 3. Bridgewater Corp. offered holders of its 1,000 convertible bonds a premium of $160 per bond to induce conversion into shares of its common stock. What are the characteristics of a corporation quizlet? iii) General partners manage and have personal liability acts, thinks, and feels in a way that matches some commonly accepted ?good? Par. 3. c) Keeping detailed minutes of the meeting, AgencyAction Binding the Corporation Parties to the legal agency relationship, i) Corporation = Principal v) Personal liability B) Directors are responsible for the shareholders of the corporation. Stockholders are agents for the corporation only if they are also employees or designated as agents. v) Dissolved by withdrawal of a general partner, i) Legal entity separate from shareholders i) Corporation can act humanitarianly if that humanitarian effect is a secondary effect or purpose that comes after the primary purpose of creating a profit or long-term benefits of the company What are some of the characteristics of a corporation? 1) GAAP requires firms to carry intangible assets they have purchased at cost less an allowance for amortization (the equivalent of depreciation, applied to intangibles), Accounting & Financial Reporting - Liabilities, Liabilities account for the accounts that firms owe to others, whether pursuant to written evidence of indebtness or otherwise Things you have to give up when you make a particular choice. Government regulation 4. What are the Characteristics of Corporations? b) Responsible for establishing the terms of any stock options executives may get as compensation Refer to the information presented in the exercise related to Donovan Company. A) Average Cost Method visualizes inventory as sold at random from a bin Limited Liability of Stockholders. 25,000 & \$ 100,000 & \$ 0.50 \\ Enjoys challenges 7. a) Current liabilities Debt the firm owes that must be paid within one year of the balance sheet date G) Attending meetings and actively participating in board discussions Once a public corporation sells its initial offering of stock, it is not part of any subsequent transfers except as a record keeper of share ownership. a) The corporation pays taxes, not individuals 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 Ability to raise large capital amounts 2. A) The duty to provide the faith and confidence and the duty of care, loyalty and obedience Corporation acts under its own name rather than in the name of its stockholders. 100,000 & 275,500 & 3.00 Here are certain characteristics that are not representative of corporations: The stockholders of a corporation have unlimited liability. i) Court's won't usually impose this strict approach on contract creditors, but they may do it for financial institutions or lenders, Piercing the Corporate Veil -- Equitable Ownership of the Corporation, A) An individual who exercised sufficient control over the corporation may be deemed to be an "equitable owner," notwithstanding the fact that the individual is not a shareholder of the corporation A. Often secured by property. (5) Common office space, address, and telephone numbers of corporate entities; Nearly every large US company has an intelligence office of some kind. What are 3 characteristics of corporations? Identify the two types of relevant costs. Question: Chapter 12 21. One of the main disadvantages of the corporate form is the a. b. c. inability to raise large amounts of capital double taxation . a) It is less risk than common stock but more risk than debt A corporation is a legal entity that is separate and distinct from its owners. Dividends. \begin{array}{lr} b) Outside Auditors ii) *Compensation Committee* \text{Total}&\underline{\$129}\\ ii) Bookkeeping works within following three categories Characteristics of Entrepreneurs 1.Risk taker 2. Owner liability Limited 7. a market where stocks and bonds are traded. What are the 4 attributes of corporation? Capital Acquisition 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. Latin for "let the buyer beware"; buyers need to know what they are purchasing, whether it has a warranty, etc. v) Manager-managed: managers act for LLC; members vote on major matters jmu women's field hockey roster The business entity carries on business activity on its own behalf. Table 4.1. A corporation is a legal entity that can own property, enter into contracts, sue and be sued. In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is second in charge. One way to view a business entity is as a separate person. 50,000 & 150,000 & 1.00 \\ Organization costs, including legal fees, underwriters' fees for stock and bond issues, and incorporation fees, are recorded as an intangible asset and amortized over a period of time not to exceed 40 years. joint venture. 2) Was not made in good faith; (10) Intermingling of property between entities Top 9 Examples of Most Common Corporations. 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