Trent Williams is a sole proprietor of a successful business. He is interested in incorporating to protect his personal assets. Which advantage of incorporation is most applicable? What are other advantages of organizing as a corporate entity?
What will be an ideal response?
Stockholders are not personally liable for the debts of the corporation. Other advantages of the corporate entity form include the following:
• Stockholders cannot bind the business to a contract; lack of mutual agency
• Indefinite life
• Can raise more money than sole proprietorships and partnerships
• Transfer of ownership is easy
You might also like to view...
Which of the following statements about duplicitous negotiations is not true?
A. Duplicitous negotiations occur in parallel with the substantive negotiation and concern how the negotiation will proceed. B. Skilled duplicitous negotiators are very difficult to detect. C. A negotiator using duplicitous negotiations may do so because their BATNA is better than any agreement. D. Managing duplicitous negotiations is more art than science.
The direct method of preparing the statement of cash flows
A) results in more cash from operating activities, but less cash from investing activities, and the same total cash flow as the indirect method. B) converts each item on the income statement to its cash equivalent. C) reports interest and dividends received in the investing activities section. D) All of these choices.
When using the accounting rate-of-return method, the net income has to be averaged over the life of the investment
Indicate whether the statement is true or false
Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage. Earl perceived price as ________ for a good or service, while most consumers recognize price as the ________ made to acquire a good or service.
A. the break-even amount; total cost B. the overall sacrifice; monetary payment C. a fixed cost; variable payment D. a variable cost; fixed cost E. the money paid; overall sacrifice