Question

Indicate whether each of the following statements is true or false. 1. The corporation is an entity separate and distinct from its owners. select between True and False 2. The liability of stockholders is normally limited to their investment in the corporation. select between True and False 3. The relatively low amount of government regulation of corporations is an advantage of the corporate form of business. select between True and False 4. There is no journal entry to record the authorization of capital stock. select between True and False 5. No-par value stock is quite rare today.

Answer 1

Answer:1 True, 2 True, 3 True, 4 True 5 True

Explanation:

The business is seen as a separate legal entity separate from the owner. The reason for this is to know exactly what the capital employed by the owner's and investors have yielded

The liability of each shareholders for debt of the company is limited to the amount of capital in form of shares to the company or the amount each shareholders have agreed to contribute in the event of winding up or liquidation of the company

In a free market economy, government allows individual to own business they allow them to decide what to produce and how to produce it.however government plays a little role in business, but what government do is to provide an enabling environment for them to operate so that they can thrive. But government put in place some laws to control business activities.

The authorise capital is the capital contributed by the promoters of the company at inception of the company. It is a capital stated in their memorandum of association which are registered by the registrar of company.It is recorded not recorded in the journal

The common shares are issued either at par or non par value. When no stated value is on the share certificate it is known as non par valueThe value assigned to a share on the share certificate is the par value. But now, the two value commonly used are the book value and market value the book value is the total value that has been invested in the company common shares and how much will be available should the company liquidate. The market price is the stock market price which usually can be found on the financial page of the daily newspapers.