Question 1

When Alyssa decides that she no longer wants her Radio Shack stock, she will discover that a related benefit of a corporation is

Accepted Answer

A)   the ease of transfer of ownership.
B)   its perpetual life.
C)   limited liability.
D)   specialized management.
E)   avoiding double taxation.F) None of the above
G) All of the above

Question 2

The citizens of a number of small rural towns have decided to form an association that will allow them to purchase electricity at a much cheaper rate than they are currently paying.This alliance is referred to as a _____.

Accepted Answer

A)   joint venture
B)   syndicate
C)   cooperative
D)   private corporation
E)   S-corporationF) A) and E)
G) A) and C)

Question 3

Because of rising fuel costs, a group of farmers have organized a retail gasoline outlet so they can make more reasonable purchases.This type of business is referred to as a _____.

Accepted Answer

A)   syndicate
B)   cooperative
C)   joint venture
D)   corporation
E)   S-corporationF) A) and D)
G) C) and D)

Question 4

When incorporating, a business

Accepted Answer

A)   may incorporate in any state that it chooses.
B)   must incorporate in the state in which its headquarters are located.
C)   must incorporate in the state in which it does the most business.
D)   must receive the secretary of state's permission to incorporate in any state other than the one in which its corporate headquarters will be located.
E)   None of the above are correct.F) B) and D)
G) All of the above

Question 5

Karen Howard loves to cook and receives unqualified praise whenever she prepares a meal for someone.Encouraged by these compliments and eager to put her culinary talents to good use, Karen decides to open a small neighborhood restaurant.Since she plans to maintain complete control of the business, she will most likely organize it as a _____.

Accepted Answer

A)   limited partnership
B)   corporation
C)   general partnership
D)   cooperative
E)   sole proprietorshipF) A) and D)
G) B) and E)

Question 6

Which of the following is not an advantage of a sole proprietorship?

Accepted Answer

A)   It is easy to form and dissolve.
B)   It has unlimited liability.
C)   Profits are taxed as personal income.
D)   There is no legal requirement to reveal vital facts about the business.
E)   The owner keeps all profits.F) A) and E)
G) A) and B)

Question 7

A hostile takeover is a situation in which

Accepted Answer

A)   the management and board of directors of the targeted firm disapprove of the proposed merger.
B)   stockholders are paid a golden parachute.
C)   the targeted firm is dismantled to avoid the merger.
D)   the government makes the decision that the corporate raider can purchase the targeted firm.
E)   the corporate raider receives a sum of money to leave the targeted firm alone.F) B) and C)
G) B) and E)

Question 8

Corporate officers are elected by the stockholders.

Accepted Answer

A) True 
 B)False

Question 9

Samantha's Dilemma
Samantha graduated from college and needed to decide where she wanted to work.She had several options.Her aunt Julie owned and operated a small business that she started about twenty years ago.Julie, an individual owner of her business, informed Samantha that she could work for her.On one hand, Samantha thought it would be a great opportunity to be able to work for her aunt, learn the business, and then run the business when her aunt retired.On the other hand, she also felt that she wanted something a little more challenging; a job where she could really use her education.Her other option would be to work for a company that a friend and her husband had started and jointly owned.It was a rapidly growing company with plenty of opportunity for advancement.However, Samantha had some reservations about this choice because she was not sure she wanted to work for friends.Her last option was to work for a large retail company, headquartered in Maryland, which had stores across the United States.
After much consideration, Samantha decided she didn't want an opportunity and a job because someone knew her.She wanted to prove how motivated and hard-working she was.Once she weighed all the advantages and disadvantages of her different options, she decided to work for the large retail company so that she could gain the most experience for herself.
-Refer to Samantha's Dilemma.What type of company does Samantha's friend operate?

Accepted Answer

A)   incorporation
B)   partnership
C)   franchise
D)   corporation
E)   sole proprietorshipF) C) and D)
G) B) and E)

Question 10

The partner who can lose only what he or she has invested in a business is the _____.

Accepted Answer

A)   general partner
B)   sole proprietor
C)   manager
D)   employee
E)   limited partnerF) D) and E)
G) A) and B)

Question 11

Although a partnership pays no income tax, the Internal Revenue Service requires partnerships to file an annual information return that states the amount of distributions made to each partner.

Accepted Answer

A) True 
 B)False

Question 12

Economists, financial analysts, corporate managers, and stockholders all agree that mergers are good for both the company and the economy.

Accepted Answer

A) True 
 B)False

Question 13

A corporation is perhaps the easiest form of business to organize.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an advantage of a sole proprietorship?

Accepted Answer

A)   The owner has unlimited liability.
B)   The business ceases to exist when the owner dies.
C)   There is a limit to the amount one person can borrow.
D)   Profits are taxed as individual income.
E)   There is one-person control of all aspects of the business.F) B) and E)
G) A) and E)

Question 15

The top governing body of a corporation is known as the _____.

Accepted Answer

A)   incorporators
B)   stockholders
C)   management
D)   officers
E)   board of directorsF) B) and C)
G) A) and E)

Question 16

Daniel, Thomas, and Lucas are partners in a law firm under a typical partnership agreement in which each owns an equal share of the business.Thomas dies suddenly of a heart attack.What will most likely become of the partnership?

Accepted Answer

A)   It will immediately cease to exist and Daniel and Lucas will have to find new jobs.
B)   Thomas's share of the business will automatically be split between Daniel and Lucas.
C)   Daniel and Lucas will be able to purchase Thomas's interest from his estate.
D)   Daniel and Lucas will have to quickly find a new partner to take Thomas's place.
E)   It will dissolve, and Daniel and Lucas will lose personal property to pay business debts.F) B) and C)
G) B) and E)

Question 17

With regard to taxation of partnerships, which of the following statements is correct?

Accepted Answer

A)   Profits are taxed twice.
B)   Each partner is taxed in the same way as a sole proprietor.
C)   Taxes are paid on a partnership's profits, after which each partner pays taxes on his or her share of the profits.
D)   A partnership is exempt from taxes.
E)   The partnership is taxed as a separate entity.F) C) and E)
G) A) and E)

Question 18

Articles of partnership are a legal document issued by the secretary of state.

Accepted Answer

A) True 
 B)False

Question 19

Common stock carries all the following rights except the right to

Accepted Answer

A)   vote on changes to the corporate charter.
B)   share in profits.
C)   receive information about the corporation.
D)   receive part of the profit before other classes of stock.
E)   attend the annual stockholders' meeting.F) A) and E)
G) All of the above

Question 20

What types of information should a partnership agreement contain?

Accepted Answer

A partnership agreement is a formal docu...

Exam 4: Choosing a Form of Business Ownership

Correct Answer
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The top governing body of a corporation is known as the _____.

Correct Answer
verified

Which of the following is an advantage of a sole proprietorship?

Correct Answer
verified

Common stock carries all the following rights except the right to

Correct Answer
verified

With regard to taxation of partnerships, which of the following statements is correct?

Correct Answer
verified

Articles of partnership are a legal document issued by the secretary of state.

Correct Answer
verified

Correct Answer
verified

When Alyssa decides that she no longer wants her Radio Shack stock, she will discover that a related benefit of a corporation is

Correct Answer
verified

Which of the following is not an advantage of a sole proprietorship?

Correct Answer
verified

Daniel, Thomas, and Lucas are partners in a law firm under a typical partnership agreement in which each owns an equal share of the business.Thomas dies suddenly of a heart attack.What will most likely become of the partnership?

Correct Answer
verified

Economists, financial analysts, corporate managers, and stockholders all agree that mergers are good for both the company and the economy.

Correct Answer
verified

A corporation is perhaps the easiest form of business to organize.

Correct Answer
verified

The partner who can lose only what he or she has invested in a business is the _____.

Correct Answer
verified

The citizens of a number of small rural towns have decided to form an association that will allow them to purchase electricity at a much cheaper rate than they are currently paying.This alliance is referred to as a _____.

Correct Answer
verified

Corporate officers are elected by the stockholders.

Correct Answer
verified

Although a partnership pays no income tax, the Internal Revenue Service requires partnerships to file an annual information return that states the amount of distributions made to each partner.

Correct Answer
verified

What types of information should a partnership agreement contain?

Correct Answer
Answered by ExamLex AI
A partnership agreement is a formal docu...
View Answer

When incorporating, a business

Correct Answer
verified

A hostile takeover is a situation in which

Correct Answer
verified

Because of rising fuel costs, a group of farmers have organized a retail gasoline outlet so they can make more reasonable purchases.This type of business is referred to as a _____.

Correct Answer
verified

Exam 4: Choosing a Form of Business Ownership

Correct AnswerverifiedShow Answer

The top governing body of a corporation is known as the _____.

Correct AnswerverifiedShow Answer

Which of the following is an advantage of a sole proprietorship?

Correct AnswerverifiedShow Answer

Common stock carries all the following rights except the right to

Correct AnswerverifiedShow Answer

With regard to taxation of partnerships, which of the following statements is correct?

Correct AnswerverifiedShow Answer

Articles of partnership are a legal document issued by the secretary of state.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When Alyssa decides that she no longer wants her Radio Shack stock, she will discover that a related benefit of a corporation is

Correct AnswerverifiedShow Answer

Which of the following is not an advantage of a sole proprietorship?

Correct AnswerverifiedShow Answer

Daniel, Thomas, and Lucas are partners in a law firm under a typical partnership agreement in which each owns an equal share of the business.Thomas dies suddenly of a heart attack.What will most likely become of the partnership?

Correct AnswerverifiedShow Answer

Economists, financial analysts, corporate managers, and stockholders all agree that mergers are good for both the company and the economy.

Correct AnswerverifiedShow Answer

A corporation is perhaps the easiest form of business to organize.

Correct AnswerverifiedShow Answer

The partner who can lose only what he or she has invested in a business is the _____.

Correct AnswerverifiedShow Answer

The citizens of a number of small rural towns have decided to form an association that will allow them to purchase electricity at a much cheaper rate than they are currently paying.This alliance is referred to as a _____.

Correct AnswerverifiedShow Answer

Corporate officers are elected by the stockholders.

Correct AnswerverifiedShow Answer

Although a partnership pays no income tax, the Internal Revenue Service requires partnerships to file an annual information return that states the amount of distributions made to each partner.

Correct AnswerverifiedShow Answer

What types of information should a partnership agreement contain?

Correct AnswerAnswered by ExamLex AIA partnership agreement is a formal docu...View AnswerShow Answer

When incorporating, a business

Correct AnswerverifiedShow Answer

A hostile takeover is a situation in which

Correct AnswerverifiedShow Answer

Because of rising fuel costs, a group of farmers have organized a retail gasoline outlet so they can make more reasonable purchases.This type of business is referred to as a _____.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
A partnership agreement is a formal docu...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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