Question 1

Builders Inc.,Real Estate Broker,Inc.,and Developers,Inc.form a business to purchase,develop,and build a shopping mall in Temecula,California.According to their agreement,the business will operate only until the mall is built,then the mall will be sold to Downtown Mall,Inc.,an owner and operator of shopping malls across the United States.Once the sale is complete,their business will be dissolved.What type of business have they formed?

Accepted Answer

A)   Syndicate
B)   Corporation via merger
C)   Limited-liability company
D)   Joint ventureE) B) and C)
F) A) and C)

Question 2

Mercedes-Benz,which is chartered as a corporation in Germany but conducts much of its business in the United States,is known as a(n) ____ in the United States.

Accepted Answer

A)   foreign corporation
B)   alien corporation
C)   domestic corporation
D)   S-corporation
E)   private corporationF) B) and D)
G) None of the above

Question 3

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) C) and D)
G) A) and D)

Question 4

Surplus funds of a not-for-profit organization are distributed to members of the board of directors.

Accepted Answer

A) True 
 B)False

Question 5

The major reason why businesses change from sole proprietorships to other forms of ownership is to

Accepted Answer

A)   gain unlimited liability.
B)   avoid unlimited liability.
C)   avoid lack of continuity.
D)   obtain help and eliminate the problem of too much to do in one day.
E)   offer advancement opportunities for employees.F) A) and B)
G) A) and E)

Question 6

Which of the following is an example of a vertical merger?

Accepted Answer

A)   The purchase of TWA by American Airlines
B)   The purchase of Marathon Oil Company by U.S.Steel
C)   The purchase of Kentucky Fried Chicken by PepsiCo
D)   The purchase of Malone's Cost-Plus Supermarkets by the Kroger supermarket chain
E)   The purchase of Gulf Oil by Standard Oil Company of CaliforniaF) A) and B)
G) None of the above

Question 7

Suppose Bill Gates,founder of Microsoft,is interested in a small software company.He may offer to purchase the stock of this company at a price that is just high enough to tempt the current stockholders.This action would be called a

Accepted Answer

A)   monopoly.
B)   tender offer.
C)   proxy fight.
D)   hostile takeover.
E)   white knight offer.F) B) and D)
G) A) and B)

Question 8

A technique used to gather enough stockholder votes to control a targeted company is a

Accepted Answer

A)   tender offer.
B)   stockholder fight.
C)   proxy fight.
D)   porcupine fight.
E)   poison pill.F) B) and E)
G) B) and C)

Question 9

A partnership formed to operate for a specific time period or to accomplish a specific purpose is known as a

Accepted Answer

A)   conglomerate.
B)   cooperative.
C)   joint venture.
D)   corporation.
E)   joint merger.F) A) and B)
G) A) and E)

Question 10

Michelle wants to start a business,but she is unsure of the legal form best for her.Short of cash,she has decided to take the form that is the least expensive and most flexible in terms of decision making and implementation.Which would you recommend?

Accepted Answer

A)   Joint venture
B)   Partnership
C)   Sole proprietorship
D)   Cooperative
E)   CorporationF) D) and E)
G) All of the above

Question 11

In your own words,explain the differences among a horizontal merger,a vertical merger,and a conglomerate merger.

Accepted Answer

A horizontal merger is a merger between ...

Question 12

Anyone with the money can purchase shares of PepsiCo's stock.This makes PepsiCo a(n) ____ corporation.

Accepted Answer

A)   closed
B)   open
C)   domestic
D)   foreign
E)   alienF) C) and E)
G) A) and E)

Question 13

The form of business organization that experiences double taxation is the

Accepted Answer

A)   partnership.
B)   corporation.
C)   venture company.
D)   syndicated partnership.
E)   sole proprietorship.F) A) and E)
G) A) and D)

Question 14

Since someone must be responsible for a partnership's debts,a limited partnership must have at least one general partner.

Accepted Answer

A) True 
 B)False

Question 15

A horizontal merger is a merger between firms in completely unrelated industries.

Accepted Answer

A) True 
 B)False

Question 16

Meganpurchases shares of ownership in General Electric.These shares are referred to as

Accepted Answer

A)   ownership documents.
B)   stock.
C)   articles of ownership.
D)   incorporation.
E)   corporate certificates.F) None of the above
G) All of the above

Question 17

What does double taxation mean?

Accepted Answer

A)   Companies must pay taxes on their income,and then employees must pay taxes on their salaries and wages.
B)   Companies have to pay both sales taxes and income taxes.
C)   Companies must pay taxes on their earnings,and then stockholders pay taxes on their dividends.
D)   Suppliers tax their customers,and in turn these businesses tax the ultimate consumer.
E)   Companies must pay taxes on corporate income and then additional taxes on distributions to profit stockholders.F) A) and C)
G) B) and C)

Question 18

The order of difficulty and expense,from most to least,when forming a business organization is as follows:

Accepted Answer

A)   corporation,sole proprietorship,partnership.
B)   corporation,partnership,sole proprietorship.
C)   partnership,corporation,sole proprietorship.
D)   partnership,sole proprietorship,partnership.
E)   sole proprietorship,partnership,corporation.F) A) and B)
G) C) and E)

Question 19

About 85 percent of all business firms in the United States are sole proprietorships.

Accepted Answer

A) True 
 B)False

Question 20

Sandy is tired of her boss as well as corporate America in general.She decides she would like to start a business where no one tells her what to do,and she can always make the decisions.The best form of business for Sandy is a(n)

Accepted Answer

A)   partnership.
B)   limited partnership.
C)   singleship.
D)   sole proprietorship.
E)   S-corporation.F) D) and E)
G) B) and E)

Exam 4: Choosing a Form of Business Ownership

Suppose Bill Gates,founder of Microsoft,is interested in a small software company.He may offer to purchase the stock of this company at a price that is just high enough to tempt the current stockholders.This action would be called a

Correct Answer
verified

Surplus funds of a not-for-profit organization are distributed to members of the board of directors.

Correct Answer
verified

The form of business organization that experiences double taxation is the

Correct Answer
verified

Meganpurchases shares of ownership in General Electric.These shares are referred to as

Correct Answer
verified

Which of the following is an example of a vertical merger?

Correct Answer
verified

A partnership formed to operate for a specific time period or to accomplish a specific purpose is known as a

Correct Answer
verified

Michelle wants to start a business,but she is unsure of the legal form best for her.Short of cash,she has decided to take the form that is the least expensive and most flexible in terms of decision making and implementation.Which would you recommend?

Correct Answer
verified

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

Correct Answer
verified

Sandy is tired of her boss as well as corporate America in general.She decides she would like to start a business where no one tells her what to do,and she can always make the decisions.The best form of business for Sandy is a(n)

Correct Answer
verified

In your own words,explain the differences among a horizontal merger,a vertical merger,and a conglomerate merger.

Correct Answer
verified
A horizontal merger is a merger between ...
View Answer

Since someone must be responsible for a partnership's debts,a limited partnership must have at least one general partner.

Correct Answer
verified

The order of difficulty and expense,from most to least,when forming a business organization is as follows:

Correct Answer
verified

Anyone with the money can purchase shares of PepsiCo's stock.This makes PepsiCo a(n) ____ corporation.

Correct Answer
verified

The major reason why businesses change from sole proprietorships to other forms of ownership is to

Correct Answer
verified

What does double taxation mean?

Correct Answer
verified

A horizontal merger is a merger between firms in completely unrelated industries.

Correct Answer
verified

About 85 percent of all business firms in the United States are sole proprietorships.

Correct Answer
verified

A technique used to gather enough stockholder votes to control a targeted company is a

Correct Answer
verified

Correct Answer
verified

Mercedes-Benz,which is chartered as a corporation in Germany but conducts much of its business in the United States,is known as a(n) ____ in the United States.

Correct Answer
verified

Exam 4: Choosing a Form of Business Ownership

Suppose Bill Gates,founder of Microsoft,is interested in a small software company.He may offer to purchase the stock of this company at a price that is just high enough to tempt the current stockholders.This action would be called a

Correct AnswerverifiedShow Answer

Surplus funds of a not-for-profit organization are distributed to members of the board of directors.

Correct AnswerverifiedShow Answer

The form of business organization that experiences double taxation is the

Correct AnswerverifiedShow Answer

Meganpurchases shares of ownership in General Electric.These shares are referred to as

Correct AnswerverifiedShow Answer

Which of the following is an example of a vertical merger?

Correct AnswerverifiedShow Answer

A partnership formed to operate for a specific time period or to accomplish a specific purpose is known as a

Correct AnswerverifiedShow Answer

Michelle wants to start a business,but she is unsure of the legal form best for her.Short of cash,she has decided to take the form that is the least expensive and most flexible in terms of decision making and implementation.Which would you recommend?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Sandy is tired of her boss as well as corporate America in general.She decides she would like to start a business where no one tells her what to do,and she can always make the decisions.The best form of business for Sandy is a(n)

Correct AnswerverifiedShow Answer

In your own words,explain the differences among a horizontal merger,a vertical merger,and a conglomerate merger.

Correct AnswerverifiedA horizontal merger is a merger between ...View AnswerShow Answer

Since someone must be responsible for a partnership's debts,a limited partnership must have at least one general partner.

Correct AnswerverifiedShow Answer

The order of difficulty and expense,from most to least,when forming a business organization is as follows:

Correct AnswerverifiedShow Answer

Anyone with the money can purchase shares of PepsiCo's stock.This makes PepsiCo a(n) ____ corporation.

Correct AnswerverifiedShow Answer

The major reason why businesses change from sole proprietorships to other forms of ownership is to

Correct AnswerverifiedShow Answer

What does double taxation mean?

Correct AnswerverifiedShow Answer

A horizontal merger is a merger between firms in completely unrelated industries.

Correct AnswerverifiedShow Answer

About 85 percent of all business firms in the United States are sole proprietorships.

Correct AnswerverifiedShow Answer

A technique used to gather enough stockholder votes to control a targeted company is a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Mercedes-Benz,which is chartered as a corporation in Germany but conducts much of its business in the United States,is known as a(n) ____ in the United States.

Correct AnswerverifiedShow Answer

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A horizontal merger is a merger between ...
View Answer

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