Buy Business Structures and Regulatory Areas

Buy Business Structures and Regulatory Areas
Buy Business Structures and Regulatory Areas
Under the Revised Model Business Corporation Act, corporate directors
are authorized to rely on information provided by the
I. appropriate corporate officer
II. independent auditor’s report
(A) Ionly
(B) II only
(C) both I and II
(D) neither I nor II
Lucas owns 200 shares of Shea Corp. cumulative preferred stock. In the
absence of any specific contrary provisions in Shea’s articles of incorporation, which of the following statements is CORRECT?
(A) If Shea declares a dividend on its common stock, Lucas will be
entitled to participate with the common stock shareholders in any
dividend distribution made after preferred dividends are paid.
(B) Lucas will be entitled to vote if dividend payments are in arrears.
(C) Lucas is entitled to convert the 200 shares of preferred stock to a like
number of shares of common stock.
(D) If Shea declares a cash dividend on its preferred stock, Lucas becomes
an unsecured creditor of Shea.
Eco Environmental Services, Inc., is a C corporation. Which of the following is a characteristic of a C corporation?
(A) the business structure of choice for most privately held businesses
(B) is allowed to deduct dividends paid prior to paying taxes
(C) subject to double taxation on profits if dividends are paid
(D) must have only one class of stock
In the absence of fraud, the corporate veil is MOST LIKELY to be pierced
and the shareholders held personally liable if
I. a partnership incorporates its business solely to limit the liability of its partners
Il. the shareholders have commingled their personal funds with those of the corporation
(A) Ionly
(B) I only
(C) both I and II
(D) neither I nor II
Business Structures and Other Regulatory Areas ¢ 129
475. Which of the following is a corporate equity security?
I. acallable bond
Il. ashare of convertible preferred stock
(A) I only
(B) Il only
(C) both I and II
(D) neither I nor II
For what purpose will a stockholder of a publicly held corporation be
permitted to file a shareholder’s derivative lawsuit in the name of the
I. to compel payment of a properly declared dividend
II. to recover damages from corporate management for an ultra vires
management act
(A) Ionly
(B) Il only
(C) both I and II
(D) neither I nor II
In a corporation, which of the following rights does a shareholder typically
I. right to vote on fundamental changes in corporate structure such as a
II. right to reasonable inspection of corporate records
(A) lIonly
(B) Il only
(C) both I and II
(D) neither I nor II
478. Which of the following is CORRECT regarding an agreement to form a
general partnership?
I. must be filed with the state government
II. must be in writing
Ill. may be oral, or implied by conduct
(A) Iand II only
(B) Iand III only
(C) Il only
(D) IL only
130 » McGraw-Hill Education 500 Regulation Questions for the CPA Exam
479. Under the Uniform Partnership Act, which of the following statements
concerning the powers and duties of partners in a general partnership are
I. Each partner is an agent of every other partner and acts as both a
principal and an agent in any business transaction within the scope of
the partnership agreement.
II. Each partner is subject to joint and several liability on partnership
debts and contracts.
(A) Lonly
(B) II only
(C) both I and II
(D) neither I nor II
480. When a new partner is admitted to an existing partnership to replace an
outgoing partner, the liability of the newly admitted partner for existing
partnership debts is
(A) normally limited to the amount of his or her capital contribution to
the partnership
(B) normally unlimited, and the newly admitted partner’s personal property may be seized to satisfy the existing debts
(C) joint and several, as well as personal
(D) limited to whatever liability the outgoing partner had
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