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

Limited Time Offer

25%

Off

Get Premium CPA-Business Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Geoffrey

1 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.

upvoted 0 times

Sharee

5 days ago

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

upvoted 0 times

...

Martina

10 days ago

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

upvoted 0 times

...

Mona

1 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!

upvoted 0 times

Mickie

9 days ago

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

upvoted 0 times

...

Marquetta

12 days ago

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

upvoted 0 times

...

An

13 days ago

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

upvoted 0 times

...

Mariann

2 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.

upvoted 0 times

Skye

13 days ago

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

upvoted 0 times

...

Esteban

18 days ago

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

upvoted 0 times

...

Dana

23 days ago

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

upvoted 0 times

...

Loise

2 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.

upvoted 0 times

Cyril

2 days ago

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

upvoted 0 times

...

Francis

4 days ago

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

upvoted 0 times

...

Kris

6 days ago

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

upvoted 0 times

...

Vivienne

2 months ago

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

upvoted 0 times

...

Shanda

2 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.

upvoted 0 times