Question
1. Which of the following statement is incorrect concerning creditors? Group of answer choices The creditors always control the company The creditors are paid a
1.
Which of the following statement is incorrect concerning creditors?
Group of answer choices
The creditors always control the company
The creditors are paid a return of capital before the shareholders when a company is wound up
The creditors are entitled to a payment of interest regardless of whether the company has made a profit or a loss
The creditors have an equitable interest in the company
2.
Which of the following statement is correct concerning shareholders?
Debentures are another form of share capital
There is no real difference between equity and debt capital as the companys capital belongs to the company
The shareholder that has acquired 10% of a companys share capital is entitled to 10% of the companys profits as dividends
In a winding up, capital is returned to shareholders after the creditors have been paid
3.
Which of the following is a characteristic of a share?
It is personal property of the shareholder made up of a bundle of rights
It cannot be sold by the owner
It confers rights which are not enforceable by law
It is a debt due by the company to the holder
4.
An issue of debentures enables a company to:
Avoid paying tax on its income
Restrict the class of persons who may invest in the company
Borrow money from the general public
Lend money to the public
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