16. A corporation is a separate entity for legal purposes. 17. The interest or right of the owner in the management of the corporation, in its 32. Treasury stock is reported as an asset on the statement of financial position because treasury shares may be sold later. surplus profits, and upon dissolution, in the balance of its assets after the payment of debts is share of stock. 18. Retained earnings is a fund of cash accumulated from profitable operations of the Ordinary business. the total y shares 19. When no-par ordinary shares have a stated value, the stated value of the shares issued normally is considered the legal capital of the corporation 20. The entire consideration received by the corporation for its no-par value shares shall be treated as capital and shall not be available for distribution as dividends. 21. A certificate of stock is a written acknowledgment by the corporation of an interest of a shareholder in the corporate property and franchise. the par earnings r value old 22. When ordinary shares with par value are sold, the proceeds should be credited to the ordinary shares account in full. 23. The liability of a shareholder is usually limited to the shareholder's investment in the corporation. cale has 24. One disadvantage of a corporation is the lack of mutual agency. 25. The entry to record the retirement of treasury stock will include a debit to Ordinary Shares account for the amount of the cost to retire the shares. ited to 26. Treasury shares are shares that are issued but not outstanding. 27. Management engages the corporation's independent auditors. ber of 28. The limited liability of a shareholder can be viewed as both an advantage and a disadvantage. ne fair 29. The par value of share refers to its value on the open market. 30. When ordinary shares without par value are sold, the proceeds should be credited to the ordinary shares account 31. Legal capital is that portion of the contributed capital or the minimum amount of paid-in capital, which must remain in the corporation for the protection of corporate creditors. other Chapter 6: Shore Capital | 6-27