Q.

260

Which of the following statements in relation to capital stock is

false?

Answer: Letter D. None of the foregoing.

All of the statements presented are true with regards to capital stock. For a
capital stock according to Section 6; there is no authorized capital stock in no par value
shares, subscribed capital stock is still unissued and treasury stock is not part of the
outstanding capital stock.

Q. 261

One of the following is not a feature of authorized capital stock:

Answer: Letter D. It may include retained earnings.

According to Partnership and Corporation Accounting of Ballada, Retained
Earnings is the amount of capital accumulated and retained through profitable
operations of the business, it indicates that retained earnings is part of the
Shareholders Equity but not to its authorized capital stock.

Q. 262

One of the following is a feature of a share of stock:

Answer: Letter D. It requires a certificate of stock to vest ownership.

According to Section 6, certificate of stock is a written acknowledgement by the
corporation of the interest, right, and participation of a person in the management,
profits and assets of the corporation. It is the formal evidence of the holders ownership
of one or more shares and is convenient instrument for the transfer of title.

Q. 348

Which of the following is not a means for a corporation to voluntarily

dissolves itself?

Answer: Letter B. Bankruptcy

According to Section 118; a voluntary dissolution may be affected by at least 2/3
votes of outstanding capital stock/members, by the judgment of Securities and
Exchange Commission, by amending the articles of incorporation to shorten the
corporate term. Bankruptcy is an involuntary dissolution according to Sections 121.