Question 1

Harry and Ilene want to market a new line of kayaks and related gear under the brand name Journeys as a corporation-Journeys Inc. To avoid income taxes at the corporate level, they should form​

Accepted Answer

A)   ​an alien corporation.
B)   ​a close corporation.
C)   ​an S corporation.
D)   ​a private corporation.E) A) and B)
F) C) and D)

Question 2

Vince buys 500 shares of common stock in Water Services, Inc. As a shareholder of record, Vince owns a proportionate interest with regard to Water's​

Accepted Answer

A)   ​net assets.
B)   ​control.
C)   ​earnings.
D)   ​all of the choices.E) A) and C)
F) C) and D)

Question 3

The executive officers represent the ultimate authority in every corporation.​

Accepted Answer

A) True 
 B)False

Question 4

The board of Management Consultants, Inc., can delegate some of its responsibilities to​

Accepted Answer

A)   ​the firm's incorporators.
B)   ​the firm's officers.
C)   ​the firm's shareholders.
D)   ​no one.E) B) and D)
F) A) and B)

Question 5

Bay City Merchants Corporation has six shareholders, four of whom are members of the same family. All of Bay City's shareholders agree in writing to operate without shareholders' meetings. This most likely warrants​

Accepted Answer

A)   ​no penalties or sanctions.
B)   ​the imposition of a fine on Bay City.
C)   ​the imprisonment of Bay City's shareholders.
D)   ​the piercing of Bay City's corporate veil.E) None of the above
F) B) and C)

Question 6

Gina is a director on the board of Home Furnishings Inc. As a director, she may not​

Accepted Answer

A)   ​authorize major corporate policy decisions.
B)   ​decide to issue stock and bonds, and declare dividends.
C)   ​select and remove corporate officers.
D)   ​subordinate the firm's welfare to her personal interests.E) A) and B)
F) All of the above

Question 7

Rita and Susan want to form and do business as Trips & Travel, Inc. They will serve as the firm's directors and officers, and will initially hold all of the stock in the company. A corporation is owned by​

Accepted Answer

A)   ​the board of directors.
B)   ​the officers.
C)   ​the employees.
D)   ​the shareholders.E) B) and D)
F) C) and D)

Question 8

In many states, close corporations have more flexibility in determining their rules of operation.​

Accepted Answer

A) True 
 B)False

Question 9

A corporation does not have perpetual existence in most states unless the articles of incorporation state otherwise.​

Accepted Answer

A) True 
 B)False

Question 10

A vacancy on the board of directors can be filled by the board itself.​

Accepted Answer

A) True 
 B)False

Question 11

Cumulative voting refers to the accumulation of proposals presented annually for a shareholders' vote.​

Accepted Answer

A) True 
 B)False

Question 12

Neil, a majority shareholder of Oil Changes Inc., effectively excludes Polly, a minority shareholder, from the benefits of stock ownership in the firm. Polly can​

Accepted Answer

A)   ​assert the business judgment rule.
B)   ​bring a suit for damages.
C)   ​exercise de facto control.
D)   ​force a cumulative vote.E) C) and D)
F) All of the above

Exam 19: Corporations

The executive officers represent the ultimate authority in every corporation.

Correct Answer
verified

Rita and Susan want to form and do business as Trips & Travel, Inc. They will serve as the firm's directors and officers, and will initially hold all of the stock in the company. A corporation is owned by

Correct Answer
verified

Cumulative voting refers to the accumulation of proposals presented annually for a shareholders' vote.

Correct Answer
verified

A vacancy on the board of directors can be filled by the board itself.

Correct Answer
verified

Gina is a director on the board of Home Furnishings Inc. As a director, she may not

Correct Answer
verified

Harry and Ilene want to market a new line of kayaks and related gear under the brand name Journeys as a corporation-Journeys Inc. To avoid income taxes at the corporate level, they should form

Correct Answer
verified

Vince buys 500 shares of common stock in Water Services, Inc. As a shareholder of record, Vince owns a proportionate interest with regard to Water's

Correct Answer
verified

Bay City Merchants Corporation has six shareholders, four of whom are members of the same family. All of Bay City's shareholders agree in writing to operate without shareholders' meetings. This most likely warrants

Correct Answer
verified

Neil, a majority shareholder of Oil Changes Inc., effectively excludes Polly, a minority shareholder, from the benefits of stock ownership in the firm. Polly can

Correct Answer
verified

In many states, close corporations have more flexibility in determining their rules of operation.

Correct Answer
verified

The board of Management Consultants, Inc., can delegate some of its responsibilities to

Correct Answer
verified

A corporation does not have perpetual existence in most states unless the articles of incorporation state otherwise.

Correct Answer
verified

Exam 19: Corporations

The executive officers represent the ultimate authority in every corporation.​

Correct AnswerverifiedShow Answer

Rita and Susan want to form and do business as Trips & Travel, Inc. They will serve as the firm's directors and officers, and will initially hold all of the stock in the company. A corporation is owned by​

Correct AnswerverifiedShow Answer

Cumulative voting refers to the accumulation of proposals presented annually for a shareholders' vote.​

Correct AnswerverifiedShow Answer

A vacancy on the board of directors can be filled by the board itself.​

Correct AnswerverifiedShow Answer

Gina is a director on the board of Home Furnishings Inc. As a director, she may not​

Correct AnswerverifiedShow Answer

Harry and Ilene want to market a new line of kayaks and related gear under the brand name Journeys as a corporation-Journeys Inc. To avoid income taxes at the corporate level, they should form​

Correct AnswerverifiedShow Answer

Vince buys 500 shares of common stock in Water Services, Inc. As a shareholder of record, Vince owns a proportionate interest with regard to Water's​

Correct AnswerverifiedShow Answer

Bay City Merchants Corporation has six shareholders, four of whom are members of the same family. All of Bay City's shareholders agree in writing to operate without shareholders' meetings. This most likely warrants​

Correct AnswerverifiedShow Answer

Neil, a majority shareholder of Oil Changes Inc., effectively excludes Polly, a minority shareholder, from the benefits of stock ownership in the firm. Polly can​

Correct AnswerverifiedShow Answer

In many states, close corporations have more flexibility in determining their rules of operation.​

Correct AnswerverifiedShow Answer

The board of Management Consultants, Inc., can delegate some of its responsibilities to​

Correct AnswerverifiedShow Answer

A corporation does not have perpetual existence in most states unless the articles of incorporation state otherwise.​

Correct AnswerverifiedShow Answer

The executive officers represent the ultimate authority in every corporation.

Correct Answer
verified

Rita and Susan want to form and do business as Trips & Travel, Inc. They will serve as the firm's directors and officers, and will initially hold all of the stock in the company. A corporation is owned by

Correct Answer
verified

Cumulative voting refers to the accumulation of proposals presented annually for a shareholders' vote.

Correct Answer
verified

A vacancy on the board of directors can be filled by the board itself.

Correct Answer
verified

Gina is a director on the board of Home Furnishings Inc. As a director, she may not

Correct Answer
verified

Harry and Ilene want to market a new line of kayaks and related gear under the brand name Journeys as a corporation-Journeys Inc. To avoid income taxes at the corporate level, they should form

Correct Answer
verified

Vince buys 500 shares of common stock in Water Services, Inc. As a shareholder of record, Vince owns a proportionate interest with regard to Water's

Correct Answer
verified

Bay City Merchants Corporation has six shareholders, four of whom are members of the same family. All of Bay City's shareholders agree in writing to operate without shareholders' meetings. This most likely warrants

Correct Answer
verified

Neil, a majority shareholder of Oil Changes Inc., effectively excludes Polly, a minority shareholder, from the benefits of stock ownership in the firm. Polly can

Correct Answer
verified

In many states, close corporations have more flexibility in determining their rules of operation.

Correct Answer
verified

The board of Management Consultants, Inc., can delegate some of its responsibilities to

Correct Answer
verified

A corporation does not have perpetual existence in most states unless the articles of incorporation state otherwise.

Correct Answer
verified