The residual interest in a corporation belongs to the
A) management.
B) creditors.
C) common stockholders.
D) preferred stockholders.

Question

Quizplus · Accepted Answer

The residual interest of a corporation refers to the amount of assets remaining after all liabilities have been paid. This leftover value belongs to the owners of the company, which are the common stockholders. Preferred stockholders have a prior claim to dividends and assets, but only up to a certain point. Creditors have a claim to receive payment for the debt owed to them, but they do not own any part of the company. Management may have ownership in the company, but this is not a definitive characteristic and can vary depending on the specific circumstances of the corporation. Therefore, the best choice is C) common stockholders.

The Residual Interest in a Corporation Belongs to the