Asked by Efrem Wondale on May 20, 2024
Verified
Which of the following is not a characteristic of a corporation?
A) Corporations are organized as a separate legal taxable entity.
B) Ownership is divided into shares of stock.
C) Corporations experience an ease in obtaining large amounts of resources by issuing stock.
D) A corporation's resources are limited to its individual owners' resources.
Legal Taxable Entity
An organization or individual subject to tax laws, with an obligation to file tax returns and pay taxes based on income or transactions.
Shares of Stock
Units of ownership interest in a corporation or financial asset, giving shareholders a claim on part of the company's assets and earnings.
Issuing Stock
The process by which a company distributes shares to investors for the first time, typically to raise capital for expansion or other corporate activities.
- Understand the characteristics, formation, and financial dynamics of corporations.
Verified Answer
SR
Shaima RehmaniMay 22, 2024
Final Answer :
D
Explanation :
Corporations are separate legal entities, with ownership divided into shares of stock. They can easily raise large amounts of resources by issuing stock. However, a corporation's resources are not limited to its individual owners' resources, as it has the ability to borrow, issue bonds, and engage in other forms of financing.
Learning Objectives
- Understand the characteristics, formation, and financial dynamics of corporations.