Question 1

Unlimited liability holds a sole proprietor personally responsible for all the debts of the business.

Accepted Answer

A) True 
 B)False

Question 2

Nortons, Inc. is a hardware store that is owned by members of the Norton family as well as a few close friends of the family. This company is a(n)

Accepted Answer

A)   sole proprietorship.
B)   partnership.
C)   open corporation.
D)   closed corporation.
E)   public corporation.F) A) and E)
G) A) and B)

Question 3

Habitat for Humanity and Girl Scouts are both examples of

Accepted Answer

A)   cooperatives...
B)   quasi-government corporations..
C)   limited-liability corporations
D)   cooperatives.
E)   not-for-profit corporations.,F) A) and E)
G) B) and D)

Question 4

Kerry wants to start a business to sell handmade jewelry. She is very competent at making the jewelry and teaching others to make it, and she has saved a reasonable amount of money to start the business. Who of the following would make the best partner for Kerry?

Accepted Answer

A)   Bailey, an artist with a real flair for new-aged jewelry design
B)   Ashley, Kerry's best friend who is fun to hang out with and good at solving problems
C)   Natalie, who has business experience with accounting, management, and marketing
D)   Janette, who used to work at the jewelry counter at a department store
E)   Darla, an engineer with industrial management experience but no moneyF) C) and E)
G) D) and E)

Question 5

What does the board of directors manage? What do corporate officers manage?

Accepted Answer

The board of directors and corporate off...

Question 6

Which of the following is not a disadvantage of sole proprietorships?

Accepted Answer

A)   Unlimited liability
B)   Lack of money
C)   Double taxation
D)   Lack of continuity
E)   Limited management skillsF) C) and D)
G) B) and E)

Question 7

A merger between two firms that make and sell similar products in similar markets is known as a

Accepted Answer

A)   horizontal merger.
B)   cooperative.
C)   joint venture.
D)   vertical merger.
E)   conglomerate merger.F) None of the above
G) A) and E)

Question 8

B&G, Inc.
A year ago, Kevin went to work for B&G, Inc. He has worked for the finance department ever since he started. He noticed that the corporation was only taxed as though it were a partnership. This was something that he found very odd when he first started working for the company, but he later realized it was a fairly common practice. He recognized that this was one of the advantages of this type of corporation.
While the job was challenging, Kevin was not happy. He wanted to work for a company whose main goal was to provide service to the community, not to make a profit. However, Kevin felt that, considering his present financial situation, he had to continue working for B&G, Inc. A week later, Kevin discovered there was going to be a merger between B&G, Inc. and one of its major competitors. Kevin's boss informed him that he would be getting a promotion and a raise. While he was excited about making more money, he still was not happy. He knew then that he would not be working for the company for long.
-Refer to B&G, Inc. Which of these features does not belong to this type of corporation?

Accepted Answer

A)   No double taxation
B)   Management flexibility
C)   Limited liability
D)   Personal asset protection
E)   Many Internal Revenue tax regulationsF) C) and D)
G) A) and E)

Question 9

When Compaq and Hewlett-Packard decided to become one company, this was an example of a(n)

Accepted Answer

A)   acquisition.
B)   hostile takeover.
C)   horizontal merger.
D)   conglomerate merger.
E)   joint venture.F) A) and C)
G) B) and D)

Question 10

Which of the following is an advantage of the corporate form of organization?

Accepted Answer

A)   Ownership of stock is easy to transfer.
B)   Forming a corporation is a complex and costly process.
C)   The corporation and its stockholders pay taxes on profits.
D)   A corporation must submit detailed information to government agencies.
E)   It is difficult to keep operations confidential because of required reports.F) A) and B)
G) A) and C)

Question 11

How can the following quotation best be explained: "Stockholders control the activities of a corporation"?

Accepted Answer

A)   All stockholders vote on all the major issues and problems that a company faces on a monthly basis.
B)   Stockholders are intricately involved in the daily operations of a corporation.
C)   Stockholders elect the board of directors, and this board is responsible for appointing corporate officers who manage the daily business of the corporation.
D)   Stockholders vote for the members of the board of directors, and this board makes all the daily business decisions for the corporation.
E)   Stockholders usually call company management and tell executives better ways to run the organization.F) A) and D)
G) B) and D)

Question 12

Allied Services is a transportation company that operates in most of the United States. If Allied Services decided to incorporate, in which state would it incorporate?

Accepted Answer

A)   Nebraska, the state in which it started
B)   Whatever state contributes the most to company revenues
C)   The state where the company headquarters are located
D)   Any state that the company chooses
E)   A centrally located state within the United StatesF) A) and C)
G) C) and D)

Question 13

Kim, Sandra, Jerry, and Wilma belong to a business that buys groceries in bulk, then distributes them to members. This type of business is called a

Accepted Answer

A)   cooperative.
B)   quasi-government corporation.
C)   producer cooperative.
D)   buying corporation.
E)   consumer corporation.F) B) and D)
G) B) and E)

Question 14

Describe the advantages and disadvantages of the sole proprietorship form of ownership.

Accepted Answer

Sole proprietorship is a form of busines...

Question 15

When the owner of a sole proprietorship dies, what becomes of the business?

Accepted Answer

A)   The employees take over the business.
B)   It ceases to exist unless the heirs take it over or sell it.
C)   It is automatically auctioned to the highest bidder.
D)   It ceases to exist, and no one may legally take it over.
E)   It may continue existing but only under a new name.F) B) and D)
G) A) and E)

Question 16

Ted's partnership agreement with two other men was a bit unsound. One of the problems the men were encountering was uneven productivity among the partners. The agreement required each partner to contribute to every aspect of the business to receive an equal portion of the profits. This agreement did not reflect the idea that

Accepted Answer

A)   all partners need not be equal; that is, there are different types of partners. Some may be fully active in running the business, whereas others may have a more limited role.
B)   limited partners are required to be active in day-to-day business operations.
C)   customers and creditors of a limited partnership need not be protected.
D)   the Uniform Partnership Act requires every general partnership to have at least one limited partner.
E)   each partner must agree to contracts entered into on behalf of all the others.F) A) and E)
G) C) and D)

Question 17

The top governing body of a corporation is known as the

Accepted Answer

A)   incorporators.
B)   stockholders.
C)   management.
D)   officers.
E)   board of directors.F) B) and E)
G) B) and C)

Question 18

Unlike a person, a corporation exists only on paper.

Accepted Answer

A) True 
 B)False

Question 19

Thomas wants to make money, so he starts his own business as a sole proprietor. He likes this form of business because

Accepted Answer

A)   he will get to keep all of the profits the business makes.
B)   profit is guaranteed since he will be the only owner.
C)   it will provide a steady income for him.
D)   he has to split the profits with only one other person.
E)   he has to pay small dividends to the other owners.F) A) and B)
G) A) and C)

Question 20

Shareholders of an S-corporation are taxed as if they were owners in a partnership.

Accepted Answer

A) True 
 B)False

Exam 4: Choosing a Form of Business Ownership

The top governing body of a corporation is known as the

Correct Answer
verified

Kerry wants to start a business to sell handmade jewelry. She is very competent at making the jewelry and teaching others to make it, and she has saved a reasonable amount of money to start the business. Who of the following would make the best partner for Kerry?

Correct Answer
verified

Kim, Sandra, Jerry, and Wilma belong to a business that buys groceries in bulk, then distributes them to members. This type of business is called a

Correct Answer
verified

What does the board of directors manage? What do corporate officers manage?

Correct Answer
Answered by ExamLex AI
The board of directors and corporate off...
View Answer

Shareholders of an S-corporation are taxed as if they were owners in a partnership.

Correct Answer
verified

Correct Answer
verified

Which of the following is not a disadvantage of sole proprietorships?

Correct Answer
verified

When Compaq and Hewlett-Packard decided to become one company, this was an example of a(n)

Correct Answer
verified

Nortons, Inc. is a hardware store that is owned by members of the Norton family as well as a few close friends of the family. This company is a(n)

Correct Answer
verified

Thomas wants to make money, so he starts his own business as a sole proprietor. He likes this form of business because

Correct Answer
verified

Unlimited liability holds a sole proprietor personally responsible for all the debts of the business.

Correct Answer
verified

Allied Services is a transportation company that operates in most of the United States. If Allied Services decided to incorporate, in which state would it incorporate?

Correct Answer
verified

Unlike a person, a corporation exists only on paper.

Correct Answer
verified

A merger between two firms that make and sell similar products in similar markets is known as a

Correct Answer
verified

Correct Answer
verified

Which of the following is an advantage of the corporate form of organization?

Correct Answer
verified

Describe the advantages and disadvantages of the sole proprietorship form of ownership.

Correct Answer
Answered by ExamLex AI
Sole proprietorship is a form of busines...
View Answer

Habitat for Humanity and Girl Scouts are both examples of

Correct Answer
verified

How can the following quotation best be explained: "Stockholders control the activities of a corporation"?

Correct Answer
verified

When the owner of a sole proprietorship dies, what becomes of the business?

Correct Answer
verified

Exam 4: Choosing a Form of Business Ownership

The top governing body of a corporation is known as the

Correct AnswerverifiedShow Answer

Kerry wants to start a business to sell handmade jewelry. She is very competent at making the jewelry and teaching others to make it, and she has saved a reasonable amount of money to start the business. Who of the following would make the best partner for Kerry?

Correct AnswerverifiedShow Answer

Kim, Sandra, Jerry, and Wilma belong to a business that buys groceries in bulk, then distributes them to members. This type of business is called a

Correct AnswerverifiedShow Answer

What does the board of directors manage? What do corporate officers manage?

Correct AnswerAnswered by ExamLex AIThe board of directors and corporate off...View AnswerShow Answer

Shareholders of an S-corporation are taxed as if they were owners in a partnership.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a disadvantage of sole proprietorships?

Correct AnswerverifiedShow Answer

When Compaq and Hewlett-Packard decided to become one company, this was an example of a(n)

Correct AnswerverifiedShow Answer

Nortons, Inc. is a hardware store that is owned by members of the Norton family as well as a few close friends of the family. This company is a(n)

Correct AnswerverifiedShow Answer

Thomas wants to make money, so he starts his own business as a sole proprietor. He likes this form of business because

Correct AnswerverifiedShow Answer

Unlimited liability holds a sole proprietor personally responsible for all the debts of the business.

Correct AnswerverifiedShow Answer

Allied Services is a transportation company that operates in most of the United States. If Allied Services decided to incorporate, in which state would it incorporate?

Correct AnswerverifiedShow Answer

Unlike a person, a corporation exists only on paper.

Correct AnswerverifiedShow Answer

A merger between two firms that make and sell similar products in similar markets is known as a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is an advantage of the corporate form of organization?

Correct AnswerverifiedShow Answer

Describe the advantages and disadvantages of the sole proprietorship form of ownership.

Correct AnswerAnswered by ExamLex AISole proprietorship is a form of busines...View AnswerShow Answer

Habitat for Humanity and Girl Scouts are both examples of

Correct AnswerverifiedShow Answer

How can the following quotation best be explained: "Stockholders control the activities of a corporation"?

Correct AnswerverifiedShow Answer

When the owner of a sole proprietorship dies, what becomes of the business?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
The board of directors and corporate off...
View Answer

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
Sole proprietorship is a form of busines...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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