AICPA Exam CPA-Business Topic 3 Question 89 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 89
Topic #: 3

[All CPA-Business Questions]

Which of the following actions may be taken by a corporation's board of directors without stockholder approval?

APurchasing substantially all of the assets of another corporation.

BSelling substantially all of the corporation's assets.

CDissolving the corporation.

DAmending the articles of incorporation.

Show Suggested Answer

Suggested Answer: D

Choice 'd' is correct. Shipping costs (which are selling costs) would not be considered a carrying cost associated with inventory.

Choices 'a', 'b', and 'c' are incorrect. Each of the following would be considered a carrying cost associated with inventory.

A Insurance costs.

B Cost of capital invested in the inventory.

C Cost of obsolescence.

by Maricela at Jun 02, 2024, 12:39 AM

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Geoffrey

2 months ago

The board's trying to pull a fast one, huh? Guess they think they're the corporate version of the Harlem Globetrotters or something.

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Rosina

30 days ago

C) Dissolving the corporation.

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Sharee

1 months ago

B) Selling substantially all of the corporation's assets.

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Martina

1 months ago

A) Purchasing substantially all of the assets of another corporation.

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Mona

2 months ago

This is a classic case of the board trying to pull a fast one on the shareholders. I'm going with option D - they can't amend the articles without approval!

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Mickie

1 months ago

I'm not sure about that, but I know they can't sell substantially all of the corporation's assets without approval.

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Marquetta

1 months ago

I think they can also dissolve the corporation without stockholder approval.

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An

1 months ago

I agree with you, the board shouldn't be able to amend the articles without approval.

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Mariann

3 months ago

I know the board has a lot of power, but they can't just do whatever they want without the shareholders having a say. I'd go with option C as the correct answer.

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Skye

1 months ago

A: It's important for shareholders to understand the limits of the board's power.

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Esteban

2 months ago

B: I agree, the board definitely has the authority to make that decision.

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Dana

2 months ago

A: I think option C is correct. The board can dissolve the corporation without stockholder approval.

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Loise

3 months ago

Hmm, I think option B is the right answer here. The board can sell assets, but they need shareholder approval for the big stuff like dissolution or changing the articles.

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Cyril

1 months ago

Option C is definitely out. Dissolving the corporation would need shareholder consent.

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Francis

1 months ago

I'm not sure about option A. Purchasing assets may require shareholder approval depending on the scale.

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Kris

1 months ago

I think option D is also a valid choice. Amending the articles of incorporation is within the board's authority.

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Vivienne

3 months ago

I agree, option B seems correct. Shareholder approval is needed for major decisions.

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Shanda

3 months ago

This seems tricky. I'm pretty sure the board can sell assets without approval, but dissolving the company or amending the articles would require shareholder approval.

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