1.Twenty percent of all businesses in the United States are corporations, and they account for 80% of the totalbusiness dollars generated.
a.True
b.False
2.A corporation is a separate entity for accounting purposes but
notfor legal purposes.
a.True
b.False
3.The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by thestockholder.
a.True
b.False
4.Under the Internal Revenue Code, corporations are required to pay federal income taxes.
a.True
b.False
5.Double taxation is a disadvantage of a corporation because the corporation has to pay income taxes at twice therate applied to partnerships.
a.True
b.False
6.The initial stockholders of a newly formed corporation are called directors.
a.True
b.False
7.While some businesses have been granted charters under state laws, most businesses receive their charters underfederal laws.
a.True
b.False
8.Organizational expenses are classified as intangible assets on the balance sheet.
a.True
b.False
9.The two main sources of stockholders' equity are investments contributed by stockholders and net income retainedin the business.
a.True
b.False
10.Retained Earnings represents past net income less past dividends, therefore any balance in this account would belisted on the income statement.
a.True
b.False