EXERCISE 11-1

Victoria has prepared the following list of statements about corporations.

Instructions: Identify each statement as true or false. If false, indicate how to correct the statement.

Tutor instructions: please review my answers and correct them if wrong. Then please add the statement to the false items to indicate how to correct the statement.

1. A corporation is an entity separate and distinct from its owners.	True
2. As a legal entity, a corporation has most of the rights and privileges of a person	True
3.Most of the largest U.S. corporations are privately held corporations.	False;
4.Corporations may buy, own, and sell property; borrow money; enter into legally binding contracts; and sue and be sued.	True
5. The net income of a corporation is not taxed as a separate entity	False;
6.Creditors have a legal claim on the personal assets of the owners of a corporation if the corporation does not pay its debts	False;
7.The transfer of stock from one owner to another requires the approval of either the corporation or other stockholders	False;
8.The board of directors of a corporation legally owns the corporation	False;
9. The chief accounting officer of a corporation is the controller	True
10. Corporations are subject to fewer state and federal regulations than partnerships or proprietorship.	False;