Answer
(d) Legal capital is intended to protect stockholders.
Work Step by Step
a) - Ownership of common stock usually gives voting rights. (True)
b) Stockholders’ equity section typically begins with paid-in capital. (True)
c) Authorization of capital stock is a corporate decision and does not require a journal entry. (True)
d) Legal capital, however, is intended to protect creditors, not stockholders. (False)
Therefore, the false statement is (d) Legal capital is intended to protect stockholders.
