The type of liability in which the stockholders losses are counted for only the invested amount in the firm is classified as ___________?
Correct answer: D. limited liability
- A. counted liability
- B. invested liability
- C. unlimited liability
- D. limited liability
Explanation
Limited liability restricts shareholders' maximum loss to the amount they invested in the company. Unlimited liability can expose owners to claims beyond their investment.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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