According to Lance Wilkins, founder of Call Outdoors, passionate leaders are the backbone of thriving businesses. b) Long-term liabilities Debts due more than one year from the balance sheet date, Accounting & Financial Reporting - Equity, Equity (sometimes referred to as net worth) represents the accounting value of the interests of the firm's owners acts, thinks, and feels in a way that matches some commonly accepted ?good? Did these ratios get stronger or weaker in 2016 compared to 2015? Which of the following is true with regard to the characteristics of corporations? 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. Brightstone's accounting system indicates that the total cost per tire is as follows: Clothing should always be clean and ironed properly. These taxes are substantial; they can amount to more than 40% of taxable income, may have thousands of stockholders, and its stock is traded on a national securities exchange. a business that produces goods used by other businesses or organizations. i) If you have a good cash flow from operating activities you have a health business Some refer to it as a ?legal person.? Watch on Forbes: 1. In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is second in charge. \text{Selling and administrative expenses (45\\\% variable)}&\underline{26}\\ Government regulation 4. 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." Enjoys challenges 7. Additional taxes. 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 (4) Overlap in ownership, officers, directors, and personnel; Self-Managing It's hard to manage others effectively if you. The filing fee for Articles of Incorporation is $100. 3) If the corporation becomes insolvent, and its assets must be liquidated, debt securities will have priority over equity securities 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 3. B) Business Judgment Rule 10) The board and board committees should conduct a rigorous self-assessment at least every two years, Key Responsibilities of Effective Board Members, A) Providing the institution with effective, competent management 2. Legal status Separate legal entity 8. Is Ashford nationally or regionally accredited? Characteristic Corporations 1. He is not required to consult anybody. Which is a characteristic of a generally accepted accounting principles? ii) Bond is a K that is governed by the terms and the K and the terms are set forth in what is called an Indenture ii) Apparent Authority Perceptions of the third party, not the principal. Corporations have a number of distinguishing characteristics. Mutual agency 6. Brightstone estimates that this certification would cost$165,000. One of the main disadvantages of the corporate form is the a. Characteristics of an Effective Leader. A. Flexibility of transferable ownership. 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. 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 joint venture. How to Market Your Business with Webinars? What is the standard deduction for over 65 in 2020? Requirements Generally Accepted Accounting Principles Which of the following is a characteristic of a corporation? Microsoft. Refer to the information presented in the exercise related to Donovan Company. 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 1. Withdrawal or death of an owner does not cause termination. a) Oversees the way senior executives are paid Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the following table. a) Is that third party reasonable in assuming that the agent has the authority to bind the principal? iii) At-will or definite period 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. 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. Life span. Business entities benefit society by allowing individuals to aggregate . A company shareholder is personally liable for the debt of the corporation. Money that can be borrowed as you need it, which must be paid back with interest. ii) No one factor is decisive 1) Generally, this means a member must be able to read and understand fundamental financial statements 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 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. These taxes are substantial; they can amount to more than 40% of taxable income publicly held corporation 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. Versatile. B) In order for the board to act, it must 3) Accounts Receivable = amounts not yet collected from customers to whom goods have been shipped or services delivered The liability of stockholders is limited to the amount each has invested in the corporation. B) Directors are responsible for the shareholders of the corporation. Influential leaders have a wide collection of skills, including self-confidence, reliability and honesty. Which is a disadvantage of a corporate structure? Wild, Ken W. Shaw, Financial Accounting: Information for Decisions, Just-in-time manufacturing philosophy reduces all of the following except At its most basic level, what is corporations about? C) Shareholders are liable for the debts and other obligations of the . Nearly every large US company has an intelligence office of some kind. Members can assign their economic rights in the LLC. Amazon was founded in 1994 and is a world leader in e-commerce. H) Board minutes are poorly kept and contain little information on matters discussed during the meetings or actions taken by the board 6) Prepaid Expenses = payments a firm has made in advance for services it has not yet received Relative ease of transferring ownership rights. \text { Output } & \text { TC } & \text { MC } \\ 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 Double taxation. Separate Legal Existence. 3) Ability to have influence as to who is put on the ballet as a nominee 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 B) Revenues and expenses are recorded on an accrued basis rather than a cash basis Par. Take into account a client who experiences three stages of life: youth, middle age, and old age. Corporation acts under its own name rather than in the name of its stockholders. Kremlinomics: A financial buzz word used to describe economic policies which some view to be overly leftist. Timeless. Bridgewater Corp. offered holders of its 1,000 convertible bonds a premium of $160 per bond to induce conversion into shares of its common stock. The stock of a public company is traded on a stock exchange. Ownership evidence by shares of stock 3. The sale of stock results in government regulation to protect stockholders, the owners of the corporation. b) You or a family member received more than $120,000 in direct compensation in any twelve month period over the past three years Transcribed image text: All of the following are . It advances comprehension, proper understanding, and sharing of information applicable for making decisions. What are the Characteristics of Corporations? A good logo is: Simple. Corporations have an indefinite life. They think of others. 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. What are the Characteristics of Corporations? is the process of starting and managing your own business. CORPORATIONS GENERALLY IS ABOUT HUMAN RELATIONSHIPS IN THE BUSINESS CONTEXT. Investors in a corporation need not actively manage the business, as most corporations hire professional managers to operate the business. 2) Preferred stock sits between common stock and debt a) Usually 1/3, but articles of incorporation or bylaws will specify 7) The board should establish a suitable committee structureconsistent with the institution's size and complexitythat encourages open participation by independent directors There are two types of securities: debt and equity B) A corporations articles of incorporation specify how many shares of common stock and preferred stock the corporation is authorized to issue Equity securities Equity securities consist of common stock and preferred stock There may be thousands, even millions, of stockholders in a public company. A) Corporations raise money by issuing securities to their investors. (1) Disregard of corporate formalities; a) Company records in its books information concerning every transaction in which it's involved a) There is a maturity date where you have to pay back to the principal and there is always annual interest Capital acquisition. 4) Vote on major transactions Who is the most powerful person in a corporation? The same is true for any lawsuits or insurance claims against the company. Ease of formation Requires government approval 3. a) Board of directors must recommend the amendment, which must then be approved by the holders of at least a majority of its outstanding stock 8 Which is a disadvantage of a corporate structure? iii) Corporate managers who breach their fiduciary duties can be held personally liable for any losses they cause the corporation, i) In order to encourage directors to take risks on behalf of the corporation w/out fear of personal liability for any losses which may ensue, courts have developed this rule i) 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 No managerial skills needed from stockholders because decisions are made by the Board of Directors. 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. What are some of the characteristics of a corporation? A closely held business has only a few shareholders. ii) The derivative suit was developed to alleviate this problem Less is more, fewer is better, and simple rules are the common mantra here. Professionals should always strive for a professional appearance, including appropriate attire and proper hygiene and grooming. c) When sold, they are authorized and issued or authorized and outstanding C) Last in, last out Method visualizes inventory as being added to and sold from the top of the stack, Accounting & Financial Reporting - Fixed Assets , Sometimes referred to as long-term assets or as property plant and equipment, are assets a firm uses to conduct its operations Latin for "let the buyer beware"; buyers need to know what they are purchasing, whether it has a warranty, etc. Direct management by the shareholders (owners) c. Its inability to own property d. Shareholders who have limited liability 3. Note that output is measured as the number of bottles of vitamins produced per day and that costs include a normal profit. iii) *Nominating Committee* ii) Duty of care requires a director to act in the corporations best interest and to exercise reasonable care in overseeing the corporations affairs and in making business decisions Assertive (takes the initiative in a good way!) 1) Labor laws that govern employees; environmental law; etc. Corporate managment. What are the advantages and disadvantages of the three types of business? Save my name, email, and website in this browser for the next time I comment. Advantage of Corporations. Shareholders who are mutual agents b. 5) Was made by a director or directors who otherwise were not independent If she does not believe that the agent has the authority, the principal is under a duty to investigate from your Reading List will also remove any Duration of life Unlimited 6. 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" How much does it cost to start a California corporation? Corporations are distinguished by the subchapter in chapter 1 of the IRS code that governs their tax structure. Prepare the December 31 adjusting entry and the entry on Monday, January 6, when Lovrek pays the payroll. Positive character traits are those things that draw us to other people. The corporation?s resources are limited to what the stockholders can contribute. These characteristics are as follows: Capital acquisition. They are honest in relationships. A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. i) Directors can be inside or outside 3. Which is characteristic of a limited liability company ( LLC )? The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. b. Decision maker 3. 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. 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 ii) Second "Accounting stage" iii) Perpetual life Corporation management (can be separate from ownership). iii) BJR creates a presumption that, "in making a business decision, the directors of a corporation acted on an informed basis, in good faith, and in the honest belief that the action was taken in the best interest of the company (6) The degree of discretion shown by the allegedly dominant corporation; Prepare a differential analysis dated January 21 on whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors. d) If they are repurchased by the corporation they become authorized and issued, but not outstanding, Before a corporation that has issued all the shares authorized by the articles of incorporation can issue more stock, it must amend the articles of incorporation to authorize additional shares Business Law in Canada, 11e (Yates) Chapter 11 Corporations. 4) Notes or Loans Receivable = somewhat analogous to accounts receivable. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Memorable. A) This limited liability means that a corporation's creditors can look only to the corporation's assets for payment for their claims By setting up a PAC only those who support the politician can give money 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. 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. A corporation is a legal entity that can own property, enter into contracts, sue and be sued. Stockholders are agents for the corporation only if they are also employees or designated as agents. 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. (3) The fraud or wrong results in an unjust loss or injury to the P. Piercing the Corporate Veil general overview -- advantages, etc. (5) Common office space, address, and telephone numbers of corporate entities; Key Characteristics of Different Taxes . The following independent situations require professional judgment for determining when to recognize revenue from the transactions. Since the corporation is a separate legal entity, the owners do not have the power to bind the corporation to business contracts. Now a new generation of influencers has come on the scene. 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. i) Shareholders are not authorized to act directly for the corporation, and thus cannot enforce a corporate claim against the managers. Being a person with good character means you act with honesty, respect, responsibility, caring, and other ?good? Dividends. So, the minimum grand total for forming a California corporation is $125. 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. (2) Inadequate capitalization (big one); Shareholders participate, as shareholders, in the management of the corporation. They are kind to everyone. When someone is generous, kind, energetic, or optimistic they exude energy that attracts others. 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. 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) Inherent Authority Infers from the position holds that the agent has authority What are some of the characteristics of a corporation? Creditors are limited to corporate assets for satisfaction of their claims. 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. What are 3 characteristics of corporations? ii) Unlike shareholders, board members may not vote by proxy, A) Regular Meeting Scheduled, can be held without notice, and typically at least quarterly meetings What are the characteristics of a good person? Which one of the following is not a characteristic of a corporation? For the calculation of averages, use the following amounts for 2014: total assets =$2,095,083; total stockholders equity = $1,350,300. They remember their manners. Tip. The characteristics of an S corporation differ from that of an ordinary corporation in a number of ways. c) Audit Board Committee Job is to make sure that the companies financial statement is accurate and not misleading Its charter may limit the corporation's life although the corporation may continue if the charter is extended. v) Personal liability 8) The board, through its audit committee, should verify the institution's financial management strength and effectiveness through an annual external audit Mutual agency 6. Be sure to retrieve the 2016 financial statements, not another year. Characteristics of a professional medical corporation include it being --designated as an HMO or IPA. What are the 4 attributes of corporation? The par value of corporate shares issued represents a corporation?s legal capital. Hard worker 4. 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 ii) Bookkeeping works within following three categories 1) GAAP (Generally Accepted Accounting Principals): What theory is involved in the modern corporation? Are you sure you want to remove #bookConfirmation# Can adapt to changes Industrial businesses 4) Was made by a director or directors w/ a personal interest in the decision; or 4 What are 2 characteristics of a corporation? iii) General partners manage and have personal liability a) Company classifies and analyzes the information and presents it in a set of financial statements OutputTCMC25,000$100,000$0.5050,000150,0001.0075,000187,5002.50100,000275,5003.00\begin{array}{rrr} All corporations are owned by groups of investors. 1) Cash = money in the till and money in demand deposits in the bank What is an example of a business that would have a high inventory turnover? 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 ii) If you have a good cash flow from investing and you're not an investing company that can be odd & sometimes it could be from debt, i) Represents permanent commitments of capital to a corporation by which the contributor is given shares in the corporation in the type of share that the corporation is authorized to issue Owner authority and control 7. iv) Each partner has an equal voice a) Indenture sets out the companies full obligations to the creditors, the company has no fiduciary duty to creditors, their entire obligation and relationship is set forth in the K. 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