Corporation management is both an advantage and a disadvantage of a corporation compared to a

proprietorship or a partnership.

Limited liability of stockholders, government regulations, and additional taxes are the major disadvan

of a corporation.

When a corporation is formed, organization costs are recorded as an asset.

Each share of common stock gives the stockholder the ownership rights to vote at stockholder meetin

share in corporate earnings, keep the same percentage ownership when new shares of stock are issue

share in assets upon liquidation.

The number of issued shares is always greater than or equal to the number of authorized shares.

A journal entry is required for the authorization of capital stock.

Publicly held corporations usually issue stock directly to investors.

The trading of capital stock on a securities exchange involves the transfer of already issued shares fron

existing stockholder to another investor.

The market price of common stock is usually the same as its par value.

Retained earnings is the total amount of cash and other assets paid in to the corporation by stockholde

exchange for capital stock.