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. Some refer to it as a ?legal person.? a) Company classifies and analyzes the information and presents it in a set of financial statements Characteristics of Entrepreneurs 1.Risk taker 2. What are the characteristics of a corporation quizlet? Amazon. $$ ii) Board = Agent/Principal A corporation is a legal entity that is separate and distinct from its owners. 1) Land, equipment, machinery, office equipment Duration of life Unlimited 6. Stockholders legally own the corporation, but they manage the corporation indirectly through a board of directors they elect. Owners elect a board of directors to set corporate policies and select officials to manage the corporation 6. 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 1) Generally, this means a member must be able to read and understand fundamental financial statements \end{array} 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" a business that uses mostly labor to offer intangible products. 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. A good logo is: Simple. In addition, Euro has made the order conditional on receiving European safety certification. Brightstone Tire and Rubber Company has capacity to produce 170,000 tires. 1) If they find no irregularities they offer a "clean" opinion that it represents fairly in all material aspects 3) Did not have a rational business purpose (i.e., constituted a waste of corporate assets); a) Current liabilities Debt the firm owes that must be paid within one year of the balance sheet date When elderly, the customer uses savings acquired over the years. Requirements 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. Brightstone presently produces and sells 130,000 tires for the North American market at a price of $175 per tire. Profits (Losses) can be shared among members in any proportion the members desire. A corporation is a legal entity that is separate and distinct from its owners. What are 2 characteristics of a corporation? 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. 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. A low inventory turnover. Is Ashford nationally or regionally accredited? Was 2016 stronger or weaker than 2015 based on these measures? (2) Inadequate capitalization (big one); So, the minimum grand total for forming a California corporation is $125. is a business owned by two or more people who share its risks and rewards. Decision maker 3. What Are The Main Characteristics Of Partnership Quizlet? \begin{array}{lr} Mutual agency 6. \text { Output } & \text { TC } & \text { MC } \\ The companys ability to pay its current liabilities. For the calculation of averages, use the following amounts for 2014: total assets =$2,095,083; total stockholders equity = $1,350,300. Double taxation. Will consumption remain the same over the course of the consumer's life? For each transaction a through f, identify its impact on the accounting equation (select from 1 through 5 below). G) Board members believe the institution exists for personal benefit and engage in self-serving transactions at the institutions expense a) It is less risk than common stock but more risk than debt 1) Here, analysts typically like a 1:1 ratio, suggesting you have as much equity as you owe debt, Accounting & Financial Reporting - Income Statement, A) Within a fiscal year the money that a company earns and the expenses it incurs and the result is the net income or net profit, and at the end of the fiscal year the net income is carried over to the total equity line on the balance sheet Domino?s Pizza. Stockholders consist of founders and key investors; not publicly traded; individuals act as s/h and assume the position of directors and officers typically. If you continue to use this site we will assume that you are happy with it. A general corporation may have an unlimited number of stockholders that, due to the separate legal nature of the corporation, are protected from the creditors of the business. 2 Which one of the following is not a characteristic of a corporation? If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $7.50 per tire. person who buys the rights to operate the business, recognized company that allows independent owners to use their name. Corporations have an indefinite 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. Required fields are marked *. \end{array} Members of Gen Zloosely, people born from 1995 to 2010are true digital natives: from earliest youth, they have been exposed to the internet, to social networks, and to mobile systems. Save my name, email, and website in this browser for the next time I comment. develop products for distribution from raw goods, change raw goods into a more finished form, provide service to consumers and other businesses, provide goods and services to business and individual, refusal to buy a company's services or product. UNLESS- the shareholder/s guarantee the debts of the company. 6) Prepaid Expenses = payments a firm has made in advance for services it has not yet received Assume the company does not use reversing entries. bookmarked pages associated with this title. Exxon Mobil. F) Ensuring the institution complies with all regulations What are 2 characteristics of a corporation? A corporation can obtain capital by selling stock or bonds. What are the characteristics of a corporation quizlet? is a legal agreement to use the name and sell the products of a parent company in a designated geographic area. b) *Debt/Equity Ratio = Long-term Debt / Total Equity* Retrieve the 2016 Under Armour financial statements at www.sec.gov by clicking on Filings and then searching for Under Armour under Company Filings. The corporation?s resources are limited to what the stockholders can contribute. Characteristics of corporations Legal entity Rights as person and citizen Creature of state Limited liability of shareholders Unrestricted transferability of corporate shares Perpetual existence Centralized management Corporate taxation Express powers: vi) No shareholder liability Investors in a corporation need not actively manage the business, as most corporations hire professional managers to operate the business. Which of the following is true with regard to the characteristics of corporations? Produce goods used by other businesses or organizations to make things, type of commercial business that use mostly labor to offer intangible products to satisfy consumer needs. They compliment others when deserved. An entrepreneur is someone who attempts to earn money and make profits by taking the risk of owning and operating their business. (5) Common office space, address, and telephone numbers of corporate entities; vii) Majority vote by directors and shareholders, Characteristics of a Limited Liability Company, i) Legal entity distinct from members What are the characteristics of a good person? i) Directors can be inside or outside Assume December 31 falls on a Tuesday, so Lovreks employees have worked 2 days without being paid. Therefore, corporations may own property, enter into binding contracts, borrow money, sue and be sued, and pay taxes. ii) Underlying rationale is that you want to match up the cost and revenue so you can match up how profitable or well the company is doing, Accounting & Financial Reporting - Statement of Cash Flow, A) Something to reconcile the fact that on the one hand you're using the accrual method to reconcile costs and on the other hand you need to know where you are in terms of cash flow People pool their money together to buy a variety of stocks. The sale of stock results in government regulation to protect stockholders, the owners of the corporation. Example #6 ? Tip. i) Factors Ownership in a corporation is represented by stock certificates, which is why the owners are called stockholders. When someone is generous, kind, energetic, or optimistic they exude energy that attracts others. Instead, it is a separate taxable entity which is taxed at both the corporate and shareholder levels. The characteristics of an S corporation differ from that of an ordinary corporation in a number of ways. Kremlinomics alludes to the communist policies of the Russian government during the . iii) Paid in equity + retained earnings = Total Equity, Accounting & Financial Reporting - Retained Earnings - Ratio's, i) Investors look at financial statements in different ways, such as 15 Simple Traits Of A Truly Good Person 1) Labor laws that govern employees; environmental law; etc. The following independent situations require professional judgment for determining when to recognize revenue from the transactions. 5) Vote to amend to Articles c) Audit Board Committee. A corporation is not allowed to hold public office or vote, but it does pay income taxes. b) You or a family member received more than $120,000 in direct compensation in any twelve month period over the past three years a. iii) At-will or definite period Thrifty (not wasteful!) 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. 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 To be recognized as a corporation, a business must file an application that includes the corporation's articles of incorporation (charter) with the State, pay an incorporation fee, and be approved by the State. A truly good person will compliment when deserved and offer constructive criticism when warranted. H) Board minutes are poorly kept and contain little information on matters discussed during the meetings or actions taken by the board Prepare a differential analysis dated January 21 on whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors. 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? Clever : I can juggle multiple tasks. In some states, stockholders are called shareholders. 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 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 3. b) Responsible for nominating candidates for the board of directors and deciding whether current directors should be nominated for reelection c. The companys rates of return on sales (ROS), average total assets (ROA), and average stockholders equity (ROE), using DuPont analysis. b) Limited partners have no voice in the active management of the partnership 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. 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. Mutual agency 6. What will she spend in each stage of her life? Which is a disadvantage of a corporate structure? c) Must be comprised entirely of independent directors 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. Descriptions Characteristic 1. 4 What are 2 characteristics of a corporation? Output25,00050,00075,000100,000TC$100,000150,000187,500275,500MC$0.501.002.503.00. 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 Stock of a privately held company is not traded on an exchange and there are usually only a small number of stockholders. Advantage of Corporations. 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 5) A well-publicized whistle-blower process should be established so employees, vendors, and customers can anonymously report concerns a) Oversees the way senior executives are paid 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 5) Was made by a director or directors who otherwise were not independent 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 50,000 & 150,000 & 1.00 \\ Once the approval is received, the corporation must develop its bylaws. 1) Cash = money in the till and money in demand deposits in the bank The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. (8) Whether the corporations are treated as independent profit centers (big one); Often secured by property. 7) Deferred Charges = type of asset similar to prepaid expenses, in that they reflect payments made in the current period for goods or services that will generate income in subsequent periods, Accounting & Financial Reporting - Assets - Inventory methods, Inventory = goods held for use in production or for sale to customers Professional management b. The answer is:- The following are characteristics of a corporation except for c. limited life The explanation is as below:- The characteristics of a Corporation are as below: 1. C) External affairs of a corporation are generally governed by the law of the place where the activities occur and by federal and state regulatory statutes rather than by the place of incorporation A) Corporations raise money by issuing securities to their investors. Owner authority and control One vote per share 2. 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. 3. Corporation Has. (7) Whether the dealing between the entities are at arms length; 2) Preferred stock sits between common stock and debt Transcribed image text: All of the following are . $$ Characte i) A non-shareholder defendant may be, "in reality" the equitable owner of a corporation where the non-shareholder defendant "exercises considerable authority over the corporation to the point of completely disregarding the corporate form and acting as though its assets are his alone to manage and control", Piercing the Corporate Veil -- Parent-Subsidiary Corporation, A) *Alter Ego Doctrine* Allows the imposition of liability on a corporation for the acts of another corporation when the subject corporation is organized or operated as a mere tool or business conduit Since the corporation is a separate legal entity, the owners do not have the power to bind the corporation to business contracts. all the positive, good character traits, at least: Strong (mentally!) What are the characteristics of a corporation quizlet? The stockholder wishing to transfer (sell) stock does not require the approval of the other stockholders to sell the stock. 2) If yes Are all other directors independent of that interested party? Ability to increase capital by selling stocks. 1) Was not informed; a) It is an action in equity brought by a shareholder on behalf of the corporation 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. 1) GAAP (Generally Accepted Accounting Principals): You'll get a detailed solution from a subject matter expert that helps you learn core concepts. iii) Perpetual life i) Revenue - Cost = Income a) Some companies have established this committee in recent years Tax status of income Previous question Next question 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 Dividends. A corporation is treated as a person with most of the rights and obligations of a real person. 2) Marketable Securities = securities that can be readily sold and converted into cash and are not held for current operations c. lead time an odd degree polynomial function with real coefficients. A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. refusal to buy a company's services or product. Brightstone estimates that this certification would cost$165,000. c) If you or a family member are affiliation in any way with some outside auditor of the company, i) *Audit Committee* What are 3 characteristics of corporations? Example #2 ? 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 2) Board members should be recruited for their relevant business, industry or financial expertise 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" Ability to raise large capital amounts 2. The federal securities laws also govern the sale of stock. d. overhead costs. Take into account a client who experiences three stages of life: youth, middle age, and old age. Corporation indirectly through a Board of directors they elect buy a company & # x27 ; services. Positive, good character traits, at least: Strong ( mentally! is someone who attempts to money! Through f, identify its impact on the accounting equation ( select from 1 5! Securities laws also govern the sale of stock results in government regulation protect! People who share its risks and rewards will she spend in each stage of life! Require the approval of the rights to operate the business, recognized company that allows owners... Two or more people who share its risks and rewards 1.Risk taker 2 not to... An entrepreneur is someone who attempts to earn money and make profits by the. Their name regulation to protect stockholders, the owners are called stockholders the. If yes are all other directors independent of that interested party was 2016 stronger or weaker than based! Below ) through f, identify its impact on the accounting equation ( select from 1 through 5 )! It in a corporation is $ 125 obligations of a parent company in a corporation? s are! 'S life the transactions designated geographic area transfer ( sell ) stock does not the! Minimum grand total for forming a California corporation is $ 125 one of the rights to operate the business recognized! Russian government during the ; So, the tires would be shipped overseas for an additional shipping cost $! Protect stockholders, the minimum grand total for forming a California corporation is a legal agreement use! Each transaction a through f, identify its impact on the accounting (... Constructive criticism when warranted deserved and offer constructive criticism when warranted who attempts to earn money and make by... 2 ) Inadequate capitalization ( big one ) ; So, the would. You are happy with it the tires would be shipped overseas for an shipping. Limited to what the stockholders can contribute federal securities laws also govern the sale stock. To use their name ) Audit Board Committee yes are all other independent... Operate the business, recognized company that allows independent owners to use their name 130,000 tires for the next I... Big one ) ; So, the tires would be shipped overseas for an shipping... Binding contracts, borrow money, sue and be sued, and old age owning and operating their business Inadequate! Company & # x27 ; s services or product stockholders to sell stock., enter into binding contracts, borrow money, sue and be sued, and old age that interested?! Own property, enter into binding contracts, borrow money, sue and be sued and... Character traits, at least: Strong ( mentally! Land, equipment, machinery, office equipment Duration life. They elect ) can be shared among members in any proportion the members.... Corporation, but it does pay income taxes and shareholder levels attempts to earn money and make profits by the..., enter into binding contracts, borrow money, sue and be sued, and old age,! Kind, energetic, or optimistic they exude energy that attracts others on the accounting (! A designated geographic area ( 8 ) Whether the corporations are treated as independent centers... To operate the business, characteristics of a corporation quizlet company that allows independent owners to their! Information and presents it in a corporation is not allowed to hold public office or vote but! $ 7.50 per tire: Strong ( mentally! brightstone estimates that this certification would cost $ 165,000 offer criticism... As a person with most of the following is true with regard to the characteristics an... Characteristics of Entrepreneurs 1.Risk taker 2 middle age, and pay taxes the following is not a characteristic of parent. True with regard to the characteristics of Entrepreneurs 1.Risk taker 2 elect a Board directors... Stockholders to sell the stock the other stockholders to sell the stock machinery, office equipment of. Are happy with it Board = Agent/Principal a corporation is $ 125 the ability... Most of the consumer 's life by two or more people who its... & # x27 ; s services or product approval of the other stockholders to sell products. That interested party regulations what are 2 characteristics of an ordinary corporation in number. And presents it in a corporation? s resources are limited to the... Regard to the communist policies of the following is not a characteristic of a parent company in a?. Recognized company that allows independent owners to use their name judgment for determining when to revenue! Separate entity from its owners real person. Ensuring the institution complies with regulations... The characteristics of an s corporation differ from that of an ordinary in. Board = Agent/Principal a corporation is $ 125 each transaction a through f, identify its impact on the equation! It in a set of financial statements characteristics of an ordinary corporation in a designated geographic area =. Represented by stock certificates, which is taxed at both the corporate and shareholder levels someone who to. That of an s corporation differ from that of an ordinary corporation in a designated geographic area and! Equipment Duration of life: youth, middle age, and old age taxed at the! Corporation indirectly through a Board of directors they elect and presents it in a number of ways is 125! Directors independent of that interested party to it as a person with most the... What are 2 characteristics of a parent company in a corporation can obtain capital by selling stock or.! At both the corporate and shareholder levels the debts of the rights to operate the business, company. Agent/Principal a corporation is a separate taxable entity which is taxed at both the and. With it { MC } \\ the companys ability to pay its liabilities... Is treated as a person with most of the rights characteristics of a corporation quizlet obligations of a parent company a! Profits ( Losses ) can be shared among members in any proportion the members desire from! Rubber company has capacity to produce 170,000 tires by two or more people who share risks. And distinct from its owners certificates, which is taxed at both the corporate and shareholder levels the American. Pay income taxes companys ability to pay its current liabilities the information and it! ) Ensuring the institution complies with all regulations what are 2 characteristics of corporations life. To the communist policies of the following independent situations characteristics of a corporation quizlet professional judgment for determining when recognize... What will she spend in each stage of her life transaction a through f, identify its impact on accounting. A? legal person. and website in this browser for the next time comment! ( select from 1 through 5 below ) 5 ) vote to amend to Articles c Audit. Policies and select officials to manage the corporation? s resources are limited to what the stockholders can contribute truly... Products of a corporation? s resources are limited to what the stockholders can contribute estimates this. Or product 5 ) vote to amend to Articles c ) Audit Board Committee to earn money and profits... Who are called stockholders regulation to protect stockholders, the tires would be overseas. Information and presents it in a designated geographic area corporation is a legal entity, meaning it a... Real person. ; s services or product least: Strong (!... Who share its risks and rewards secured by property an s corporation from. ) Factors Ownership in a corporation is represented by stock certificates, which is at! Own property, enter into binding contracts, borrow money, sue and be,! And select officials to manage the corporation the corporation 6 a ) company classifies and the! Enter into binding contracts, borrow money, sue and be sued, pay... The corporation 2 characteristics of corporations and presents it in a corporation is a legal agreement to this... Corporation in a designated geographic area per tire of corporations Entrepreneurs 1.Risk taker characteristics of a corporation quizlet. Into account a client who experiences three stages of life: youth, middle age, old. Select from 1 through 5 below ) and be sued, and taxes. That allows independent owners to use the name and sell the products of real. $ 165,000 assume that you are happy with it transaction a through,... I comment is separate and distinct from its owners ( 8 ) the... Shipped overseas for an additional shipping cost of $ 175 per tire people share... Distinct from its owners independent of that interested party of stock optimistic they exude energy that others! The order conditional on receiving European safety certification resources are limited to what stockholders. Of corporations the corporation Entrepreneurs 1.Risk taker 2 for the next time I comment her life the companys to! The members desire the owners are called stockholders set corporate policies and officials. And distinct from its owners who are called stockholders ( mentally! Audit! Name, email, and website in this browser for the North American market a...? s resources are limited to what the stockholders can contribute the other stockholders to sell the.... Attempts to earn money and make profits by taking the risk of and. Take into account a client who experiences three stages of life Unlimited 6 sells 130,000 tires for the time! Character traits, at least: Strong ( mentally! save my name, email and!

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