B) Business Judgment Rule 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 corporation is a legal entity that is separate and distinct from its owners. Double taxation. ii) No one factor is decisive 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. v) Manager-managed: managers act for LLC; members vote on major matters A person with ?good character? iii) At-will or definite period One of the main reasons many entrepreneurs choose to elect S corp status is because of its tax benefits. Corporations have an indefinite life. 7) The board should establish a suitable committee structureconsistent with the institution's size and complexitythat encourages open participation by independent directors 2) Was not made in good faith; A. 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. b) Survey the extent to which there are processes set up for the board to act effectively and for the directors to be held accountable 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. to plan your money, and how much will be used and how much will be invested compared to how much you plan on earning. a) Company, usually with the assistance of independent public accountants, verifies the information it has recorded and the manner in which it has presented the financial accounting, Accounting & Financial Reporting - Bookkeeping, i) Every transaction which a company is involved is included in the company's leger The following independent situations require professional judgment for determining when to recognize revenue from the transactions. 1) Land, equipment, machinery, office equipment 3) Any independent internal audit function (even if part-time) should be in place and report directly to the audit committee Brightstone presently produces and sells 130,000 tires for the North American market at a price of $175 per tire. What is an example of a business that would have a high inventory turnover? - d.$90 per unit. Example #8 ? G) Attending meetings and actively participating in board discussions 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 See Answer It advances comprehension, proper understanding, and sharing of information applicable for making decisions. Capital acquisition. 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 Output25,00050,00075,000100,000TC$100,000150,000187,500275,500MC$0.501.002.503.00. Disadvantage of Corporations. How much does it cost to start a California corporation? A corporation is treated as a "person" with most of the rights and obligations of a real person. jmu women's field hockey roster iii) Perpetual life Separate legal existence 2. to put money to use by buying a part of something, so that you may have profitable returns such as interest, or income. 50,000 & 150,000 & 1.00 \\ What are some good character traits to have? ability of profit-making organizations to compete with businesses in other countries effectiveness making the right decisions about what products or services to offer customers and how to produce and deliver them efficiency producing needed goods or services quickly and at a low cost domestic goods products made by firms in the United States a) Internal Auditor Relative ease of transferring ownership rights. Members can assign their economic rights in the LLC. Mutual agency 6. In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is second in charge. Confident : I am not afraid to ask questions. A closely held business has only a few shareholders. Is Mutual Agency a characteristic of a corporation? Is Ashford nationally or regionally accredited? 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. 5) A well-publicized whistle-blower process should be established so employees, vendors, and customers can anonymously report concerns Government regulation 4. i) Shareholders are not authorized to act directly for the corporation, and thus cannot enforce a corporate claim against the managers. Memorable. A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. Tip. Separation of owners and entity (no mutual agency). F) Ensuring the institution complies with all regulations Characte \end{array} Example #5 ? \text{Factory overhead (60\\\% variable)}&25\\ a) Presentation of the corporations financial statements fairly and accurately reflects the financial position of the company Since a corporation is a separate legal entity, creditors have recourse only to corporate assets to satisfy their claims. Characteristics of an Effective Leader. What are some of the characteristics of a corporation? The companys ability to pay its current liabilities. Living, $475.75; fixed,$679.65; share of annual, $291.17. Clever : I can juggle multiple tasks. Investors in a corporation need not actively manage the business, as most corporations hire professional managers to operate the business. These characteristics are as follows: Capital acquisition. A) The duty to provide the faith and confidence and the duty of care, loyalty and obedience Characteristics of a corporation Rating: 6,3/10 1466 reviews A corporation is a business entity that is legally recognized as an individual separate from its owners. vi) Majority decision making, i) Partnership w/ general & limited partners Which is a disadvantage of a corporate structure? What is the standard deduction for over 65 in 2020? Particularly in a public company, the stock can be easily transferred in part or total at the discretion of the stockholder. 2) Marketable Securities = securities that can be readily sold and converted into cash and are not held for current operations 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? Being a person with good character means you act with honesty, respect, responsibility, caring, and other ?good? Less Is More. Means that the relationship between shareholders and managers (directors and officers), will be governed by the corporate statutes and case law of the state where the corporation is incorporated Question: Characteristics of a corporation include? i) Alter ego is demonstrated "by evidence showing a blending of identities, or a blurring of lined distinctions, both formal and substantive, between two corporations." $50 per unit Ownership evidence by shares of stock 3. As a corporation is owned by stockholders and managed by employees, the sale of stock, death of a stockholder, or inability of an employee to function does not impact the continuous life of the corporation. How do I look up my California corporation number? Which is a characteristic of a generally accepted accounting principles? Question: Which of the following is true with regard to the characteristics of corporations? b) Responsible for establishing the terms of any stock options executives may get as compensation Was 2016 stronger or weaker than 2015 based on these measures? 3. (d) You borrow money in August from RBC Financial Group. A corporation is owned by stockholders C. All shares of a corporation must be held by a single individual D. Each stockholder has the authority to commit the corporation to a binding contract through his actions. Partnership income and expenses are said to "flow/pass through" to the partners in proportion to their ownership interests. A. Additional taxes. Duration of life 3. 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. iv) *Governance Committee* In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is second in charge. (2) Inadequate capitalization (big one); caveat venditor. Usually represents a very large portion of the assets of firms engaged in financing businesses A) Closed Corporation Held by a small group of people and not publicly traded. Relevant. vii) Majority vote by directors and shareholders, Characteristics of a Limited Liability Company, i) Legal entity distinct from members a) Must be comprised entirely of independent directors We use cookies to ensure that we give you the best experience on our website. The investors vote on the Board of Directors who are responsible for hiring management. Upon conversion of all the bonds, Bridgewater Corp. recorded the$160,000 premium as a reduction of paid-in capital. 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. Some refer to it as a legal person.. a) At-will dissolved by any partner withdrawal Prepare the December 31 adjusting entry and the entry on Monday, January 6, when Lovrek pays the payroll. A corporation can sell shares to new investors, and larger entities can issue bonds to obtain a significant amount of debt financing. 4) A code of ethics that applies to all officers, board members, and employees should be adopted and monitored for adherence by the board B) Special Meetings Can be called pursuant to articles that are set forth in the bylaws, needs to give notice & some general information about what the meeting will be about a) Is that third party reasonable in assuming that the agent has the authority to bind the principal? Advantage of Corporations. For the calculation of averages, use the following amounts for 2014: total assets =$2,095,083; total stockholders equity = $1,350,300. The Statement of Partners' Capital, Next Hard worker 4. (9) Payment of guarantee of the corporation's debt by the dominating entity; and Things you have to give up when you make a particular choice. Comment on Bridgewater's treatment of the $160,000 "sweetener. provide goods and services to business and individual. 2023 Course Hero, Inc. All rights reserved. iii) Third "Audit stage" The par value of corporate shares issued represents a corporation?s legal capital. 25,000 & \$ 100,000 & \$ 0.50 \\ Example #4 ? The stockholder wishing to transfer (sell) stock does not require the approval of the other stockholders to sell the stock. ii) *Compensation Committee* i) The portion of the authorized stock that has been sold and remains in the hands of stockholders is outstanding stock What are some of the characteristics of a corporation? A) This limited liability means that a corporation's creditors can look only to the corporation's assets for payment for their claims 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. Ownership. A corporation is not allowed to hold public office or vote, but it does pay income taxes. Amazon. Identify when revenue should be recognized in the given situation. 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 B) Instead, they need to set up Political Action Committees (PAC) & raise revenues separately and can support that way c) Must be comprised entirely of independent directors 1) Analysts typically like a 2:1 ratio, this suggests you have enough cushion to pay your bills as they become due is the process of starting and managing your own business. They are kind to everyone. 4) Was made by a director or directors w/ a personal interest in the decision; or 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. The difference between a closely held corporation and one that is publicly held is based on the size of the ownership group. 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. (3) The fraud or wrong results in an unjust loss or injury to the P. Piercing the Corporate Veil general overview -- advantages, etc. The filing fee for Articles of Incorporation is $100. iv) Default: Member-managed What are 2 characteristics of a corporation? iii) General partners manage and have personal liability Transferability of ownership Readily transferred 4. 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 v) Common shareholders elect board and vote on major matters A. For each transaction a through f, identify its impact on the accounting equation (select from 1 through 5 below). Assertive (takes the initiative in a good way!) B) Internal Affairs Doctrine Means that the relationship between shareholders and managers (directors and officers), will be governed by the corporate statutes and case law of the state where the corporation is incorporated 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 So, the minimum grand total for forming a California corporation is $125. a) Assets are values at what is called their "historical cost," which is what the company paid for them, not what they are currently worth, Accounting & Financial Reporting - Current assets , Include cash and other assets which in the normal course of business will be converted into cash in the reasonably near future However, this special order would not have a sales commission. CliffsNotes study guides are written by real teachers and professors, so no matter what you're studying, CliffsNotes can ease your homework headaches and help you score high on exams. a business that produces goods used by other businesses or organizations. a market where stocks and bonds are traded. Duration of life Unlimited 6. 1) Generally, this means a member must be able to read and understand fundamental financial statements Ability to raise large capital amounts 2. c) Audit Board Committee Job is to make sure that the companies financial statement is accurate and not misleading Professional appearance. 4) Notes or Loans Receivable = somewhat analogous to accounts receivable. What are the characteristics of a good person? What are the characteristics of a corporation quizlet? Profits (Losses) can be shared among members in any proportion the members desire. CHARACTERISTICS OF A CORPORATION 1. The board, in turn, formulates operating policies and also selects officers to execute policy and to perform daily management functions. 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. a) Articles of incorporation will create authorized shares \text{Direct materials}&\$56\\ Brightstone estimates that this certification would cost$165,000. Rather, it is, as its name indicates, a statute that is intended to be a model for statute legislatures when adopting or amending an actual corporate law. Public companies are governed under rules of the Securities and Exchange Commission ( " the SEC " ). boycott. They are honest in relationships. traits. Good people understand that others need praise. What is the unit product cost using absorption costing? The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. Separate Legal Existence. The characteristics of an S corporation differ from that of an ordinary corporation in a number of ways. Which one of the following is not a characteristic of a corporation? Ambitious 5. i) Factors At its most basic level, what is corporations about? Amazon was founded in 1994 and is a world leader in e-commerce. 6) Prepaid Expenses = payments a firm has made in advance for services it has not yet received An entrepreneur is someone who attempts to earn money and make profits by taking the risk of owning and operating their business. 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. Eisenhardt suggests that organizations should have two to seven key goals, or rules, using her vocabulary (Eisenhardt & Sull, 2001).Such goals guide how the firm operates, identify which opportunities to pursue, set priorities, manage timing of actions, and even inform business exit decisions. The same is true for any lawsuits or insurance claims against the company. Competitive: I thrive under pressure. What will she spend in each stage of her life? Ability to increase capital by selling stocks. 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 In a corporation, one stockholder cannot jeopardize other stockholders through poor decision making. 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. Promoting from within cuts recruitment and training costs. What is the difference between Hardie board and Hardie plank? Limited to their investment. a) It is an action in equity brought by a shareholder on behalf of the corporation Capital acquisition. b) Responsible for nominating candidates for the board of directors and deciding whether current directors should be nominated for reelection Assume, based on your response in the previous section, that the customer will earn$100,000 during their middle years. The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. Did these ratios get stronger or weaker in 2016 compared to 2015? 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 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 Money borrowed against a home or land. 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 a) *Current ratio = Current Assets / Current Liabilities* iv) Limited partners are passive investors and have no personal liability Examples of personal positive qualities: kind, gentle, strong, resilient, caring, assertive, hard-working, reliable, honest, practical, responsible, loyal, mature, creative, consistent, appreciative, capable, quick, sensitive, perceptive, patient, thoughtful, fit, trustworthy, shows initiative, motivated, versatile. a) Gross negligence is the standard for board of directors The most significant of these are: Separate Legal Existence Continuous Life Ability to Acquire Capital Transferability Limited Liability Government Regulations Taxation Governance and Management Let's look at each of these in turn. 100,000 & 275,500 & 3.00 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. (5) Common office space, address, and telephone numbers of corporate entities; Complimenting is not only a good thing to do, but a sign that you can be excited for other people?s triumphs. Instead, it is a separate taxable entity which is taxed at both the corporate and shareholder levels. Creditors are limited to corporate assets for satisfaction of their claims. , identify its impact on the accounting equation ( select from 1 5... Recognized in the given situation issued represents a corporation? s legal capital ; caveat venditor ask questions entity is... & \ $ 100,000 & \ $ 100,000 & \ $ 0.50 Example... Policies and also selects officers to execute policy and to perform daily functions... Majority decision making, I ) Partnership w/ general & limited partners which is separate!, Next Hard worker 4 of annual, $ 291.17 and expenses are said to flow/pass... A corporate structure any proportion the members desire par value of corporate shares issued represents a?... Get stronger or weaker in 2016 compared to 2015 ordinary corporation in good! Responsibility, caring, and other? good iii ) Third `` Audit stage '' the par of. \\ what are some good character & 150,000 & 1.00 \\ what are some of the following is a! Who are called stockholders making, I ) Factors at its most characteristics of a corporation quizlet,... Identify its impact on the board, in turn, formulates operating policies and selects! Business that produces goods used by other businesses or organizations 5 below.! To ask questions deduction for over 65 in 2020 the business, as most hire... Expenses are said to `` flow/pass through '' to the partners in proportion to their interests! Corporate assets for satisfaction of their claims Member-managed what are some good character means you act with,... ) you borrow money in August from RBC Financial Group under rules of characteristics... At both the corporate and shareholder levels, Bridgewater Corp. recorded the $ 160,000 premium as a & quot person... Among members in any proportion the members desire or organizations? s legal capital office or vote, but does. Proportion to their ownership interests ; caveat venditor the difference between a closely corporation... The approval of the following is true with regard to the partners in proportion to ownership! Only a few shareholders which of the Securities and Exchange Commission ( `` the ``... 2016 compared to 2015 rights and obligations of a real person with all regulations Characte \end { array Example. Members vote on major matters a person with good character means you act honesty! Company, the stock can be shared among members in any proportion the members desire in. 25,000 & \ $ 100,000 & \ $ 100,000 & \ $ 0.50 \\ #. Corp. recorded the $ 160,000 `` sweetener can assign their economic rights in LLC. These ratios get stronger or weaker in 2016 compared to 2015 with honesty, respect responsibility. Of owners and entity ( no mutual agency ) is the unit product cost using absorption costing look up California. By a shareholder on behalf of the $ 160,000 `` sweetener institution complies with regulations... $ 475.75 ; fixed, $ 475.75 ; fixed, $ 291.17 borrow money in August RBC..., it is an Example of a business that would have a high inventory turnover or. A world leader in e-commerce other? good character traits to characteristics of a corporation quizlet under rules of the corporation acquisition. Securities and Exchange Commission ( `` the SEC `` ) a significant amount of financing. ; members vote on major matters a person with? good is $ 100 assertive takes... Board, in turn, formulates operating policies and also selects officers to execute policy to... Are 2 characteristics of a corporation? s legal capital an action in equity by... Of her life Receivable = somewhat analogous to accounts Receivable amount of debt financing some character... Does not require the approval of the following is not a characteristic of a real person money August. Means you act with honesty, respect, responsibility, caring, and other good. Economic rights in the given situation income taxes ambitious characteristics of a corporation quizlet I ) w/! In each stage of her life being a person with? good in any proportion members... Equity brought by a shareholder on behalf of the characteristics of a corporation? legal! How do I look up my California corporation number can sell shares to new investors, and?! Who are called stockholders ; members vote on major matters a person with good character you. Shared among members in any proportion the members desire in part or total at the discretion of the and... For Articles of Incorporation is $ 100 it does pay income taxes partners ' capital, Next Hard 4. Of paid-in capital capital acquisition management functions owners and entity characteristics of a corporation quizlet no mutual agency ) $ \\... 4 ) Notes or Loans Receivable = somewhat analogous to accounts Receivable shareholder levels capitalization ( one! Below ) Securities and Exchange Commission ( `` the SEC `` ) corporation capital.. Stockholder wishing to transfer ( sell ) stock does not require the approval the. For satisfaction of their claims person & quot ; with most of the rights obligations... What is corporations about for each transaction a through f, identify its impact on the equation... Ask questions and Exchange Commission ( `` the SEC `` ) Example of a corporation? legal... Require the approval of the following is not a characteristic of a corporation is a legal entity, it! The Statement of partners ' capital, Next Hard worker 4 of an corporation. A through f, identify its impact on the board, in turn, formulates operating policies and also officers. Any proportion the members desire said to `` flow/pass through '' to the characteristics of ordinary! Expenses are said to `` flow/pass through '' to the characteristics of an s corporation differ that... Brought by a shareholder on behalf of the other stockholders to sell the stock can be transferred. Ask questions to perform daily management functions paid-in capital owners who are called stockholders of debt financing hire managers. 'S treatment of the characteristics of corporations cost using absorption costing corporate assets for satisfaction their... Capitalization ( big one ) ; caveat venditor the following is true for lawsuits! Ensuring the institution complies with all regulations Characte \end { array } Example 4! Characteristics of a corporation can sell shares to new investors, and other? good means! And Hardie plank one ) ; caveat venditor in proportion to their ownership interests for LLC ; vote... S corporation differ from that of an ordinary corporation in a good way )... Some good character traits to have all the bonds, Bridgewater Corp. the! Directors who are called stockholders the following is not a characteristic of a generally accepted accounting principles their claims product... Under rules of the $ 160,000 `` sweetener instead, it is action... Goods used by other businesses or organizations its owners who are called stockholders their.., meaning it is a world leader in e-commerce of the following is a... Its most basic level, what is the unit product cost using costing! Is $ 100 to start a California corporation number Loans Receivable = somewhat analogous to Receivable... Members vote on major matters a person with good character means you act with honesty, respect responsibility. Bridgewater 's treatment of the following is true for any lawsuits or insurance against... Does not require the approval of the other stockholders to sell the stock: which of the and! ) it is an action in equity brought by a shareholder on behalf of the $ 160,000 `` sweetener in. Income and expenses are said to `` flow/pass through '' to the characteristics of a corporation? legal. A significant amount of debt financing entities can issue bonds to obtain a significant amount of debt financing value corporate! ) Notes or Loans Receivable = somewhat analogous to accounts Receivable corporation and one that is held... Daily management functions business that would have a high inventory turnover what are 2 characteristics a. The following is true with regard to the partners in proportion to their ownership interests ordinary corporation a... California corporation number agency ) insurance claims against the company stock does not the. Goods used by other businesses or organizations living, $ 475.75 ; fixed $. Leader in e-commerce the Statement of partners ' capital, Next Hard worker 4 proportion to their ownership interests quot... Afraid to ask questions person with good character means you act with honesty, respect, responsibility,,! To have Articles of Incorporation is $ 100 select from 1 through 5 below ) '' the. Much does it cost to start a California corporation? s legal capital investors, other... Impact on the board of Directors who are called stockholders capital, Next Hard worker 4 her?... The rights and obligations of a corporate structure cost using absorption costing daily management functions by shares of stock.... The corporate and shareholder levels its most basic level, what is the unit product cost using absorption?! ) Inadequate capitalization ( big one ) ; caveat venditor: Member-managed what are 2 characteristics corporations... 1994 and is a world leader in e-commerce, but it does pay income taxes between closely. Policy and to perform daily management functions operate the business Default: Member-managed are... ( sell ) stock does not require the approval of the Securities and Exchange (. Is corporations about the LLC most basic level, what is corporations about actively manage the business, most! Identify its impact on the size of the ownership Group pay income taxes Receivable = somewhat analogous accounts! $ 160,000 premium as a reduction of paid-in capital expenses are said to `` flow/pass through '' to partners... Product cost using absorption costing through '' to the partners in proportion their!
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