2014 figures for the company are as follows (in thousands): Accounts receivable (net) $279,835; Inventories$536,714; Accounts payable $210,432. One way to view a business entity is as a separate person. 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 Limited liability for owners. (usually, a closed corporation operates like a partnership). iv) Each partner has an equal voice 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. He is not required to consult anybody. What are the 4 attributes of corporation? It is a team of people, including suppliers of money and labor, who work together to earn a return on their investment. Dividends. ii) Apparent Authority Perceptions of the third party, not the principal. Goal setter 6. F) Meetings are characterized by little or no discussion, or board members go out of their way to avoid conflict, resulting in rubber stamping Characteristic Corporations 1. 4) Debt securities can be secured or unsecured and are called bonds, debentures, or notes, B) A corporations articles of incorporation specify how many shares of common stock and preferred stock the corporation is authorized to issue a) General partners have comparable liability to the liability they have in a general partnership, but a limited partners liability is limited to the capital she has contributed to the partnership Business entities benefit society by allowing individuals to aggregate . i) Factors 5) Inventory = goods held for use in production or for sale to customers (average cost method; first in, first out method; last in, last out method) Next, measure that student's attitude toward the concept you have created in your verbal description. Clever : I can juggle multiple tasks. to plan your money, and how much will be used and how much will be invested compared to how much you plan on earning. 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. Corporations are distinguished by the subchapter in chapter 1 of the IRS code that governs their tax structure. What Are The Main Characteristics Of Partnership Quizlet? Separate taxable entity (leading to double taxation) 7. person who buys the rights to operate the business, recognized company that allows independent owners to use their name. Good people understand that others need praise. Additional taxes Corporations must pay federal and state income taxes as a separate legal entity. a) Presentation of the corporations financial statements fairly and accurately reflects the financial position of the company Brightstone's accounting system indicates that the total cost per tire is as follows: a) You have been an employee of the company, or a family member has been an executive of the company A corporation is treated as a person with most of the rights and obligations of a real person. 7) The board should establish a suitable committee structureconsistent with the institution's size and complexitythat encourages open participation by independent directors a) Company records in its books information concerning every transaction in which it's involved Corporate Authority -- Directors, you are not independent if You are not independent if CHARACTERISTICS OF A CORPORATION 1. What are 2 characteristics of a corporation? Example #4 ? Double taxation of dividends c. Charter d. 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" Often, a bullwhip type of effect occurs. 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 (7) Whether the dealing between the entities are at arms length; b. 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. c) Audit Board Committee. 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) The portion of the authorized stock that has been sold and remains in the hands of stockholders is outstanding stock Positive character traits can be developed in ourselves. b) *Debt/Equity Ratio = Long-term Debt / Total Equity* 3) Any independent internal audit function (even if part-time) should be in place and report directly to the audit committee Find the total monthly expenses. Terms in this set (8) 1) CEO and CFO must personally certify that the financial statements are in fact accurate, Accounting & Financial Reporting - Retained Earnings, A) The cumulative amount the company has retained from its products The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. While it offers the same liability protection as a C corporation, an S corporation comes with certain restrictions that can limit its . Brightstone estimates that this certification would cost$165,000. One of the main reasons many entrepreneurs choose to elect S corp status is because of its tax benefits. Duration of life 3. A. In addition, Euro has made the order conditional on receiving European safety certification. joint venture. Duration of life 3. all the positive, good character traits, at least: Strong (mentally!) Corporate managment. Particularly in a public company, the stock can be easily transferred in part or total at the discretion of the stockholder. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $7.50 per tire. Courteous : I care about workplace atmosphere. \text{Direct materials}&\$56\\ c) At least three of them have to be financially literate a) Articles of incorporation will create authorized shares 5 What are the 4 attributes of corporation? 6) Prepaid Expenses = payments a firm has made in advance for services it has not yet received You can begin building your success by developing these 11 must-have traits of a powerful and successful leader. 6) Amend the Bylaws, Warrant gives the creditor the option to buy the stock by a particular time, for a particular price, and when this is exercise the corporation has to issue additional stock to cover the obligation, i) A bond is a loan to the company for a fixed period of time 1) Are there members who are interested? C. The title of the corporation is limited by the death of the owner Which of the following is a characteristic of a limited liability company (LLC)? iv) Ratification of Authority Focuses on the principal, if the agent has acted w/out authority but the principal takes no steps to repudiate the authority and accepts the benefits of the authority, than we can say that the principal has ratified the authority, AgencyAction Binding the Corporation Types of Authority Apparent Authority , Perceptions of the third party, not the principal. --owned by shareholders. Characteristics of a corporation include a. Terms in this set (8) Which is characteristic of a limited liability company ( LLC )? Clothing should always be clean and ironed properly. Separate Legal Existence Professionals should always strive for a professional appearance, including appropriate attire and proper hygiene and grooming. 100,000 & 275,500 & 3.00 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. H) Conducting periodic evaluations of individual member and overall board performance caveat emptor. 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. 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. c. boycott. ii) Income - Dividends = Retained earnings a) At-will dissolved by any partner withdrawal The federal securities laws also govern the sale of stock. bookmarked pages associated with this title. Assertive (takes the initiative in a good way!) Brightstone is evaluating a special order from a European automobile company, Euro Motors, Euro is offering to buy 20,000 tires for$116 per tire. When elderly, the customer uses savings acquired over the years. Limited liability 5. Tip. 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 Tip. (2) Such control has been used to commit a fraud or other wrong; and At its most basic level, what is corporations about? Consistency. - c. $70 per unit The same is true for any lawsuits or insurance claims against the company. iii) Third "Audit stage" Usually represents a very large portion of the assets of firms engaged in financing businesses 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 b) Outside Auditors Separate Legal Existence. Complimenting is not only a good thing to do, but a sign that you can be excited for other people?s triumphs. 9) Management and the board of directors should have formal succession plans in place that are reviewed annually It may be established as a profit making or nonprofit organization and may be publicly or privately held. What are the characteristics of a corporation quizlet? c. The companys rates of return on sales (ROS), average total assets (ROA), and average stockholders equity (ROE), using DuPont analysis. Advantage of Corporations. How do I look up my California corporation number? Profits (Losses) can be shared among members in any proportion the members desire. Example #5 ? What are the advantages and disadvantages of the three types of business? They are kind to everyone. Nature of Communication. 1. i) Like the alter ego doctrine, the single business enterprise doctrine is an equitable remedy, which applies when the corporate form is "used as part of an unfair device to achieve an inequitable result" (credit). Mutual agency 6. 1) Generally, this means a member must be able to read and understand fundamental financial statements i) Shareholders are not authorized to act directly for the corporation, and thus cannot enforce a corporate claim against the managers. Characteristics of a professional medical corporation include it being --designated as an HMO or IPA. 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 Less is more, fewer is better, and simple rules are the common mantra here. 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. One of the main disadvantages of the corporate form is the a. Question: Chapter 12 21. Expert Answer. 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 a. Early in your career, you might exercise authority by being the go-to person on a certain subject within your . A company shareholder is personally liable for the debt of the corporation. Capital acquisition. The customer makes $20,000 in labour income when they are young. Your email address will not be published. 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 1) Here, analysts typically like a 1:1 ratio, suggesting you have as much equity as you owe debt, Accounting & Financial Reporting - Income Statement, A) Within a fiscal year the money that a company earns and the expenses it incurs and the result is the net income or net profit, and at the end of the fiscal year the net income is carried over to the total equity line on the balance sheet A closely held business has only a few shareholders. Output25,00050,00075,000100,000TC$100,000150,000187,500275,500MC$0.501.002.503.00. Upon conversion of all the bonds, Bridgewater Corp. recorded the$160,000 premium as a reduction of paid-in capital. " [Leadership] is all about influencing people," said Kirstin Lynde, founder of leadership development firm Catalyze Associates, in a Facebook Live interview. Personal assets of stockholders are not available to creditors or lenders seeking payment of amounts owed by the corporation. A number of characteristics distinguish a corporation from a sole proprietor or partnership. 1) Analysts typically like a 2:1 ratio, this suggests you have enough cushion to pay your bills as they become due Capital acquisition. --B and C only --A, B, and C This problem has been solved! The corporation is a separate legal person, but can neither sue nor be sued. B) Working with management to promote ethical, positive corporate culture Partnership income and expenses are said to "flow/pass through" to the partners in proportion to their ownership interests. 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. They are generous with their belongings. Can have current assets, fixed assets, and intangible assets One that can be called on when needed, the next best choice you could have taken (Because there are never enough resources to produce all the goods and services people want there must be trade-offs. d. overhead costs. ii) *Compensation Committee* What is the unit product cost using absorption costing? Separate legal existence 2. ". Stock Terminology. A. Corporations have certain characteristics that are unique to this form of organization. Key Characteristics of Different Taxes . A company shareholder is personally liable for the debt of the corporation. caveat venditor. 4) Vote on major transactions Legal status 5. There is a 50% chance that the customer will earn$40,000 and a 50% chance that the consumer will earn $100,000 throughout middle age. This statement is true. c. lead time 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 See Answer 2) Board members should be recruited for their relevant business, industry or financial expertise Example #1 ? The so-called S corps do not pay corporate taxes, but rather they transfer income,. Your email address will not be published. What are the Characteristics of Corporations? Fundamentals of Financial Management, Concise Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. Tax status of income Previous question Next question They compliment others when deserved. Government regulation 4. iii) Perpetual life Since the corporation is a separate legal entity, the owners do not have the power to bind the corporation to business contracts. 1 What are the characteristics of a corporation quizlet? 2) If yes Are all other directors independent of that interested party? One of the disadvantages of a corporate structure is the corporation pays its own tax burden on net income and then the stockholders pay income tax on the dividends they receive. Ownership. ii) Formed by filing articles of incorporation with the state When you see the list of filings for the company, select the Form 10-K for 2016. Confident : I am not afraid to ask questions. Dividends. 8 Which is a disadvantage of a corporate structure? This statement is true. They compliment others when deserved. We use cookies to ensure that we give you the best experience on our website. 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