Question

Which one of these statements is fasle? A. Ownership of common stock gives the owner a voting right. B. The stockholders' equity section begins with paid-in capital. C. The authorization of capital stock does not result in a formal accounting entry. D. Legal capital is intended to protect stockholders.

Answer 1

Answer: D. Legal capital is intended to protect stockholders.

Explanation:

Legal capital is not intended to protect stockholders.

Legal capital is that amount of the company equity that is not allowed to leave the company. It can not be distributed dividend or other means . legal capital is said to be the par value of common stock and the stated value of the preferred stock that a business has issued to investors.