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Exam 4: Choosing a Form of Business Ownership

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Question 91

Multiple Choice

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Quarrels among business associates have become common.The associates quarrel over what products the firm should sell,division of authority,selection of personnel,whether to bring family members into the business,whether to expand,and who is contributing most to the firm's success.Such feuding,which damages business relationships,occurs most frequently in what form of business?

A) Partnerships
B) Cooperatives
C) Corporations
D) Sole proprietorships
E) S-corporations

F) D) and E)
G) C) and E)

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Question 92

Multiple Choice

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In the state in which it is incorporated,a business is known as a(n)

A) S-corporation.
B) resident corporation.
C) public corporation.
D) foreign corporation.
E) domestic corporation.

F) B) and C)
G) C) and D)

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Question 93

Multiple Choice

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Lucas has been saving his excess funds for several years and has contemplated entering a partnership with a friend from college.Lucas hesitates because he knows that it is ____ to invest money in a partnership and ____ to get the money back out.

The purchase of one corporation by another is called a merger.

Julio decides his business will begin staying open until 7 p.m.instead of 6 p.m.The next day,the shop stays open until 7 p.m.This environment of flexibility to quickly change is characteristic of what form of business organization?

The form of business organization that comprises about 18 percent of all businesses in the United States is the

A common tactic of corporate raiders is to start a proxy fight.

Jonathan inherited a large amount of money from his uncle.Jonathan wishes to start his own business,and his lawyers encourage him to make it a corporation.What disadvantage of a sole proprietorship are the lawyers trying to avoid?

Preferred stockholders receive dividends before dividends are paid to common stockholders.

Habitat for Humanity and Girl Scouts are both examples of

Financial experts agree that takeovers enhance corporate profitability and productivity.

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

A distribution of earnings to the stockholders of a corporation is a(n)

A corporation chartered in Mexico and doing business in the United States is known as a foreign corporation in the United States.

​At one time,AT&T and T-Mobile wanted to merge but were prevented from doing so by the Justice Department.The government maintained that to permit the merger would eliminate choices for the consumers because these companies represented the majority of the cell phone service industry. What is the name given to this kind of merger?

All of the following are disadvantages of corporations except

Which of the following is necessary for starting a sole proprietorship?

A corporation chartered in Texas and doing business in Texas is known as a domestic corporation.

Ernesto,Juan,and Jesus have been friends since elementary school.After graduating from college with degrees in accounting,they started a partnership for the purpose of providing tax preparation,accounting,and auditing services to the public.Before the end of the first year,the partners had a disagreement regarding the division of labor,the size of accounts they should seek,and whether to provide certified audits or reviewed statements only.Which of the following best represents the problem they are experiencing?

Prudential and several other large insurance companies have joined together to underwrite an extremely large insurance policy.This sort of association is referred to as a(n)