1Common shareholders have all of the following rights except the right to:

a. vote for the board of directors.

b. vote on company plans and investments.

c. share corporate profit through receipt of dividends.

d. share in assets upon liquidation in proportion to their holdings.

2Disadvantages of a corporation compared to a proprietorship or partnership do not include:

a. potential for additional tax.

b. separate legal existence.

c. increased cost and complexity.

d. ownership separated from management.

3A company's authorized shares are:

a. the total number of shares the company is allowed to sell.

b. the number of shares owned by shareholders.

c. the number of shares with the authority to vote on the board of directors.

d. the number of shares authorized to receive regular dividends.

4A company issues 5,000 common shares to its lawyers in settlement of their bill for $25,000. The shares are currently trading at $6 per share. The entry to record this transaction will credit common shares for:

a. $30,000

b. $25,000

c. $5,000

d. $125,000

5In order to pay a dividend the company must:

a. have enough cash on hand to pay for its ongoing operations as they become due.

b. ensure their legal capital is maintained.

c. have a declaration of dividends by the board of directors.

d. have all of these.