Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 11 - Reporting and Analyzing Stockholders' Equity - Questions - Page 603: 5

Answer

A Corporation is a separate legal entity from its owners. The corporation acts under in its own name rather than in the name of its stockholders.

Work Step by Step

The corporation can buy and sell property in its own name; it can borrow the funds in its own name. Further the corporation has to pay taxes as a separate entity.
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