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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Shanda

3 days 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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Andree

4 days ago

But what about amending the articles of incorporation? Can the board do that without stockholder approval?

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Coletta

6 days ago

I agree with you, Rashad. Dissolving the corporation is a major decision that the board can make on its own.

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Rashad

10 days ago

I think the board can dissolve the corporation without stockholder approval.

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