CHOOSE THE CORRECT ANSWER

1. The issuance of shares of ordinary share capital to shareholders

a.) decreases ordinary share capital authorized

b.) decreases ordinary share capital outstanding

c.) increases ordinary share capital outstanding

d.) increases ordinary share capital authorized

2. A non-cash asset received in exchange for share capital is recorded at

a.) its fair market value

b.) the higher of its book value or fair market value

c.) the lower of its book value or fair market value

d.) ots book value

3. The maximum number of shares of stock that the government gives a corporation permission to issue is the

a.) granted shares

b.) outstanding shares

c.) issued shares

d.) authorized shares

4. Which of the following statements describing a corporation is not true?

a.) When ownership of a corporation changes, the corporation does not terminate

b.) A corporation is subject to a greater governmental regulations

c.) Shareholders are the owners of a stock corporation

d.) Shareholders own the business and manage its day to day affairs

5. They are the persons who have agreed to take original, unissued shares of a corporation but will pay at a later date.

a.) Underwriters

b.) Promoters

c.) Subscribers

d.) Partners