Partnership & corporation

True or False Encircle T if the statement is correct, F if the statement is false. T A corporation has limited life, because death or withdrawal of a shareholder dissolves and liquidates the corporation. T 2. Any share premium or additional paid in capital on share capital sold through a subscription is recorded at the date the subscription contract is signed, rather than when the share capital is issued. T F 3. Similar to a partnership, a corporation may be formed by the mere agreement of five or more persons. T FO 4. The costs of organizing a corporation are recognized as assets, because the economic benefits are received during the period of corporate existence. T F 5 The owners of a corporation are liable for partnership debts even beyond their contribution to the corporation. T F 6. Preference share does not carry the right to vote. T F 7 . Non-cash assets received by a corporation in exchange for share capital issued are recorded at the par value of the shares issued. T F 8. A corporation is a legal entity separate and distinct from its owners. T F 9. Corporate creditors ordinarily have recourse only to corporate assets in satisfaction of their claims. T F 10. An advantage of a corporation over a partnership is that it is less subject to government regulations. Shareholders own the business and manage the day-to-day T F 11. affairs of the corporation. 12. Preference share dividends are usually paid prior to payment of F ordinary share dividends. 13 The maximum number of share capital that the government F grants a corporation permission to issue is called the authorized shares. 14 A stock certificate is issued to the subscriber upon full payment of his subscription. F 15 Under the journal entry method of accounting for share capital transactions, the account Share Capital is credited upon issuance of share capital. 16. Shares issued in exchange for services received shall be T recorded at the fair value of the services received or the fair value of the shares issued, whichever is more reliably determinable. T F 17. Because of the power of succession, a corporation has an unlimited life. T 18. A private corporation is one created for the purpose of governing a particular segment of the government. T F 19. The certificate of capital stock is a written acknowledgement by the corporation of the shareholders' interest in the corporation. F 20. An ordinary shareholder has the right to vote in the election of the board of directors of the corporation. T F 21. The corporation will always issue all the delinquent shares to the highest bidder. TF 22. A corporation has the power to acquire its own assets and incur financial obligations. T F 23. Under the journal entry method of accounting for share capital, the amount of issued share capital is determined by deducting the balance of Unissued Share Capital account from the balance of the Authorized Share Capital account