8) The board, through its audit committee, should verify the institution's financial management strength and effectiveness through an annual external audit b) Shareholders, particularly in closely held corporations, may be reluctant to approve a board resolution to issue more shares out of the fear that those additional shares will dilute their voting power Duration of life Unlimited 6. 3. 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 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. The board, in turn, formulates operating policies and also selects officers to execute policy and to perform daily management functions. 2) Balance sheet value (or book value) = Cost less allowance for depreciation, Accounting & Financial Reporting - Intangible Assets , Such as patents or trademarkshave no physical existence, but often have substantial value Duration of life 3. vi) Majority decision making, i) Partnership w/ general & limited partners Shareholders who are mutual agents b. 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. 1) Dividends ii) No one factor is decisive Capital acquisition. Government regulation 4. Government regualtions. Public companies are governed under rules of the Securities and Exchange Commission ( " the SEC " ). Stock of a privately held company is not traded on an exchange and there are usually only a small number of stockholders. i) The relationship among what are described as directors, (the officers whom have the day-to-day operations), the shareholders and employeeswhat their rights are with one another For each transaction a through f, identify its impact on the accounting equation (select from 1 through 5 below). refusal to buy a company's services or product. Will consumption remain the same over the course of the consumer's life? A) Corporations raise money by issuing securities to their investors. H) Conducting periodic evaluations of individual member and overall board performance \text{Direct labor}&22\\ A corporation can obtain capital by selling stock or bonds. (2) Such control has been used to commit a fraud or other wrong; and A. Example #1 ? C) Actively helping plan the long-term direction and goals for the institution Some images used in this set are licensed under the Creative Commons through Flickr.com.Click to see the original works with their full license. These characteristics are noted below. If you continue to use this site we will assume that you are happy with it. 1. 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 Corporation Has. Some of the main characteristics of small businesses are: They can be further categorized. Corporations have certain characteristics that are unique to this form of organization. Output25,00050,00075,000100,000TC$100,000150,000187,500275,500MC$0.501.002.503.00. maintaining employment process training and development staff, Latin for "let the seller beware"; sellers need to take responsibility for the products they sell, process by which people attempt to preserve, protect, and manage resources, one who selects, purchases, uses, or disposes of services or goods, a movement to pass laws that protect the consumer from unsafe and unfair business practices, basic rights of consumers to safety, to be heard, to choose, to be informed, to have problems corrected, to consumer education, and to service, business practices that are deliberately misleading, the legal responsibility a manufacturer has to make a safe product, collecting items for processing so that they might be used again, when someone advertises a product at a low price to lure consumers into the store, then tries to get them to switch to a more expensive item, a card allowing someone to make a purchase on borrowed money. An investment expert makes all of the buy and sell decisions, as source of supply, support, or aid. In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is second in charge. i) Must be a quorum present What are the characteristics of a corporation quizlet? 100,000 & 275,500 & 3.00 Goal setter 6. 1. How much does it cost to start a California corporation? Since the corporation is a separate legal entity, the owners do not have the power to bind the corporation to business contracts. iv) Managers = Agent, AgencyAction Binding the Corporation Types of Authority, i) Actual Authority Principal specifies expressly what the agent is authorized to do, through words or conduct 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. b. setup time Identify the two types of relevant costs. Corporations enjoy most of the rights and responsibilities that individuals possess: they can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes. A low inventory turnover. 1) The corporation (the real party at interest) is a nominal defendant and the plaintiff-shareholder (in reality, her attorney), controls prosecution of the suit (8) Whether the corporations are treated as independent profit centers (big one); A person with ?good character? B) In order for the board to act, it must High Fence Whitetail Hunts Nestled in the hills of south central Kentucky lies an oasis of trophy whitetail bucks and the best Kentucky deer hunting you've ever seen. B) Business Judgment Rule It must be paid back with interest, A person sets his/her money aside for future income to meet long term goals, individuals purchase part of the corporation. Who is the most powerful person in a corporation? Owners elect a board of directors to set corporate policies and select officials to manage the corporation 6. bookmarked pages associated with this title. A company shareholder is personally liable for the debt of the corporation. Now a new generation of influencers has come on the scene. a) Is that third party reasonable in assuming that the agent has the authority to bind the principal? Some refer to it as a ?legal person.? A company with fewer than 100 employees is generally considered a small-sized business, while one with between 100 and 1,500 employees is a medium-sized business. The corporation is considered a separate legal entity, conducting business in its own name. As a leader, you may exhibit the following traits: If you have strong leadership skills, one of your biggest advantages to a company is that they can eventually promote you. B) Instead, they need to set up Political Action Committees (PAC) & raise revenues separately and can support that way Accounting & Financial Reporting - Bookkeeping works within following three categories a) Internal Auditor first line of defense against financial fraud D) Setting clear policies and monitoring the institution's operations for compliance What are the 4 attributes of corporation? 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: Corporation management (can be separate from ownership). What are the Characteristics of Corporations? Assume, based on your response in the previous section, that the customer will earn$100,000 during their middle years. is a legal agreement to use the name and sell the products of a parent company in a designated geographic area. d. overhead costs. 5 What are the 4 attributes of corporation? \text{Factory overhead (60\\\% variable)}&25\\ The sale of stock results in government regulation to protect stockholders, the owners of the corporation. Enjoys challenges 7. to plan your money, and how much will be used and how much will be invested compared to how much you plan on earning. 2 Which one of the following is not a characteristic of a corporation? The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. 3 What are the three major sections on a statement of cash flows, and what type of cash inflows and outflows should be included in each section? John David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine, Calculus for Business, Economics, Life Sciences and Social Sciences, Karl E. Byleen, Michael R. Ziegler, Michae Ziegler, Raymond A. Barnett, Elliot Aronson, Robin M. Akert, Samuel R. Sommers, Timothy D. Wilson. 2) Was not made in good faith; What is a relevant cost? Fluctuating demand is another characteristic of B2B markets: a small change in demand by consumers can have a big effect throughout the chain of businesses that supply all the goods and services that produce it. iii) Perpetual life (3) Intermingling of funds; (2) Inadequate capitalization (big one); I) No assessment of the board, its committees, or individual directors is ever performed to determine the effectiveness or contributions made to the institution's decision-making process or success, Alexander Holmes, Barbara Illowsky, Susan Dean, John David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine, Elliot Aronson, Robin M. Akert, Samuel R. Sommers, Timothy D. Wilson, Information Technology Project Management: Providing Measurable Organizational Value. B) Working with management to promote ethical, positive corporate culture Therefore, corporations may own property, enter into binding contracts, borrow money, sue and be sued, and pay taxes. Positive character traits can be developed in ourselves. The stockholder wishing to transfer (sell) stock does not require the approval of the other stockholders to sell the stock. The LLC can be considered as a partnership or sole proprietorship for income tax purposes. A corporation can sell shares to new investors, and larger entities can issue bonds to obtain a significant amount of debt financing. c. lead time is the process of starting and managing your own business. a) Unless the P can rebut the presumption, a court will evaluate the substantive merits of the action ". Can adapt to changes Industrial businesses How do I look up my California corporation number? a) Somewhat analogous to apparent authority, can be said that inherent authority is a type of apparent authority There are two types of securities: debt and equity, Equity securities consist of common stock and preferred stock, 1) Common stock assumes the greatest risk of the success or failure of the corporate and has the greatest expected return. The stock of a public company is traded on a stock exchange. iv) Board of directors manage These 5 qualities make a logo instantly identifiable, and ensure that when customers look at it, they'll connect with your brand. The corporation?s resources are limited to what the stockholders can contribute. d. The company pays cash dividends to shareholders. 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 Professionals should always strive for a professional appearance, including appropriate attire and proper hygiene and grooming. The customer makes $20,000 in labour income when they are young. Limited Liability of Stockholders. Which is a characteristic of a generally accepted accounting principles? Refer to the information presented in the exercise related to Donovan Company. A) This limited liability means that a corporation's creditors can look only to the corporation's assets for payment for their claims service business. Tip. What are 2 characteristics of a corporation? Assume the company does not use reversing entries. Duration of life 3. They compliment others when deserved. Limited to their investment. 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" 3. Question: Chapter 12 21. Tax status of income Previous question Next question Cooperative : I get along well in a team setting. 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. Ownership of a corporation is held in shares of capital stock, which are transferable units. Generally Accepted Accounting Principles Which of the following is a characteristic of a corporation? a) At-will dissolved by any partner withdrawal What are the characteristics of a corporation quizlet? A corporation is not allowed to hold public office or vote, but it does pay income taxes. 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 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. What is the unit product cost using absorption costing? and any corresponding bookmarks? from your Reading List will also remove any The loan and the interest are repayable in full in November. Published on 22 Oct 2018. 2014 figures for the company are as follows (in thousands): Accounts receivable (net) $279,835; Inventories$536,714; Accounts payable $210,432. 25,000 & \$ 100,000 & \$ 0.50 \\ iii) At-will or definite period a market where stocks and bonds are traded. F) Ensuring the institution complies with all regulations Additional taxes Corporations must pay federal and state income taxes as a separate legal entity. ii) When looking to who can speak on behalf of the corporation you look to the chain of command, California ApproachPseudo Foreign Affairs (to internal affairs), i) California holds the view that if the most important interest in the company are operated in Californiaif 50 percent of the company is run in the statethen California state law will apply, i) Association of two or more people Corporation acts under its own name rather than in the name of its stockholders. Ownership in a corporation is represented by stock certificates, which is why the owners are called stockholders. While it offers the same liability protection as a C corporation, an S corporation comes with certain restrictions that can limit its . Example #6 ? C) Rationale is that if a corporation used its own treasury funds then s/h who produce revenue for the corporation could be supporting a politician they don't support. The difference between a closely held corporation and one that is publicly held is based on the size of the ownership group. A company shareholder is personally liable for the debt of the corporation. vi) No member liability Influential leaders have a wide collection of skills, including self-confidence, reliability and honesty. v) Dissolved by withdrawal of a general partner, i) Legal entity separate from shareholders c) Audit Board Committee. How long does it take for braces to close gaps. 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 iii) Third "Audit stage" 7) The board should establish a suitable committee structureconsistent with the institution's size and complexitythat encourages open participation by independent directors A truly good person will compliment when deserved and offer constructive criticism when warranted. 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 By withdrawal of a public company is not allowed to hold public office or vote, but it does income! 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