Q19E_2 - Horngren'S Financial And Managerial Accounting

Question

Identifying advantages and disadvantages of a corporation

Following is a list of advantages and disadvantages of the corporate form of business. Identify each quality as either an advantage or a disadvantage.

b. Entity has continuous life.

Step-by-Step Solution

Answer

Entity has continuous life is considered as advantage of a company.

Step 1: Basic Introduction

Shareholders are considered as the owners of the company to the proportion of their shareholdings. Common stockholders have right to vote in the meeting of the corporation.

Step 2: Identification of quality

Corporation has a lawful separate legal existence that means the corporation has its own lawful rights and obligations, separate to the owners/ shareholders of the corporation.