Limited liability means that A. shareholders in a corporation must pay some but not all of...
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Limited liability means that A. shareholders in a corporation must pay some but not all of the liabilities of the firm. B. corporations have only limited responsibility for their actions. C. corporations have limited accountability for their debts and obligations. D. shareholders in a corporation cannot lose more than their investment in the firm. The government grants limited liability to the owners of corporations A. because the owners do not run the corporation and thus should not be responsible for its debts. B. to make market economies more equitable and efficient. C. to allow the corporation to borrow money in the form of bonds. D. to limit shareholder risk and thus encourage investment in corporations. Limited liability becomes more important for firms trying to raise funds from a large number of investors, rather than from a small number of investors, because A. investors that make a small investment in a firm may be unwilling to risk all their personal assets if the firm fails. B. investors that have a large investment and who can exercise control in the firm, do not want to be responsible for the firm's debts. C. the shareholders are usually very confident that the firm they have invested in is not at risk to fail. D. investors that make a small investment in a firm are willing to risk all their personal assets if the firm fails. Limited liability means that A. shareholders in a corporation must pay some but not all of the liabilities of the firm. B. corporations have only limited responsibility for their actions. C. corporations have limited accountability for their debts and obligations. D. shareholders in a corporation cannot lose more than their investment in the firm. The government grants limited liability to the owners of corporations A. because the owners do not run the corporation and thus should not be responsible for its debts. B. to make market economies more equitable and efficient. C. to allow the corporation to borrow money in the form of bonds. D. to limit shareholder risk and thus encourage investment in corporations. Limited liability becomes more important for firms trying to raise funds from a large number of investors, rather than from a small number of investors, because A. investors that make a small investment in a firm may be unwilling to risk all their personal assets if the firm fails. B. investors that have a large investment and who can exercise control in the firm, do not want to be responsible for the firm's debts. C. the shareholders are usually very confident that the firm they have invested in is not at risk to fail. D. investors that make a small investment in a firm are willing to risk all their personal assets if the firm fails.
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Related Book For
Accounting Information Systems
ISBN: 978-1133935940
10th edition
Authors: Ulric J. Gelinas, Richard B. Dull
Posted Date:
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