财务会计英语 练及答案ch12.doc

CHAPTER 12 CORPORATIONS: ORGANIZATION, CAPITAL STOCK TRANSACTIONS, AND DIVIDENDS  Chapter 12—Corporations: Organization, Capital Stock Transactions, and Dividends TRUE/FALSE 1. Twenty percent of all businesses in the United States are corporations and they account for 80% of the total business dollars generated. ANS: F DIF: 1 OBJ: 01 2. The corporation was defined as a separate legal entity by Chief Justice Marshall during the twentieth century. ANS: F DIF: 2 OBJ: 01 3. A corporation is a separate entity for accounting purposes but not for legal purposes. ANS: F DIF: 2 OBJ: 01 4. The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder. ANS: T DIF: 1 OBJ: 01 5. Under the Internal Revenue Code, corporations are required to pay federal income taxes. ANS: T DIF: 1 OBJ: 01 6. Double taxation is a disadvantage of a corporation because the same party has to pay taxes twice on the income. ANS: F DIF: 2 OBJ: 01 7. The initial owners of stock of a newly formed corporation are called directors. ANS: F DIF: 1 OBJ: 01 8. While some businesses have been granted charters under state laws, most businesses receive their charters under federal laws. ANS: F DIF: 1 OBJ: 01 9. By-laws are part of the business's charter or articles of incorporation. ANS: F DIF: 2 OBJ: 01 10. Organizational expenses are classified as intangible assets on the balance sheet. ANS: F DIF: 1 OBJ: 01 11. The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business. ANS: T DIF: 1 OBJ: 02 12. Retained earnings represents past net incomes less past dividends, therefore any balance in this account would be listed on the income statement. ANS: F DIF: 1 OBJ: 02 13. The balance in retained earnings at the end of the period is created by closing entries. ANS: T DIF: 1 OBJ: 02 14