Question 1

Legally, a partnership must

Accepted Answer

A)  have at least one limited partner.
B)  have at least one general partner.
C)  make all owners general partners.
D)  not have any general partners.
E)  designate a limited partner to be responsible for all debts of the partnership.F) None of the above
G) B) and E)

Question 2

How might a sole proprietorship have a possible tax advantage?

Accepted Answer

A)  It does not have to make tax payments until the end of the year.
B)  It does not have to pay federal income taxes.
C)  It does not have to charge sales tax on its merchandise.
D)  It does not pay special state and federal taxes that corporations pay.
E)  It is subject to a form of double taxation.F) B) and C)
G) B) and D)

Question 3

Susan has a commercial laundry service that has been growing rapidly. She wants to continue to grow the business, but she needs access to more money and does not want to risk her personal assets. Susan contacts her lawyer to see if all the legal requirements are met to start the process of

Accepted Answer

A)  partnering.
B)  selling her business.
C)  incorporating.
D)  consulting.
E)  corporate opening.F) C) and E)
G) C) and D)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

With regard to limited-liability companies, which of the following statements is false?

Accepted Answer

A)  Many experts believe that an LLC is nothing more than an S-corporation.
B)  An LLC can have no more than 100 stockholders.
C)  An LLC avoids double taxation.
D)  An LLC provides limited-liability protection to the personal assets of the owners.
E)  When compared to regular corporations, there are fewer government regulations that apply to LLCs.F) A) and D)
G) A) and E)

Question 6

Laura 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) A) and B)
G) C) and E)

Question 7

With respect to combined business skills and knowledge, which of the following partnerships is best?

Accepted Answer

A)  Joe, Louis, and Raul own a bakery.They are able bakers by trade.Each wants to spend all of his time baking items.
B)  Carolyn, Melvin, and Cindy own a boutique.Carolyn has marketing expertise.Melvin has ten years' experience operating a successful small store, including hiring employees, handling inventory control, buying, and managing credit.Cindy is a CPA.Each has agreed to use his or her experience and expertise for the success of the business.
C)  Mary and Robert, both young pharmacists, own a pharmacy.Neither has taken a business course, but they are willing to learn.
D)  Carter and Renée own a video store.Renée is most experienced as a homemaker and mother.Carter has worked as an auto mechanic for ten years.
E)  Vince and Linda own a vacuum cleaner store.Vince knows everything possible about store operations.Linda is wealthy and can provide investment capital.F) A) and E)
G) B) and E)

Question 8

A voluntary association of two or more people acting as co-owners of a business is known as a partnership.

Accepted Answer

A) True 
 B)False

Question 9

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 proprietorship.F) None of the above
G) B) and D)

Question 10

Most stockholders attend a corporation's annual meeting and vote in person.

Accepted Answer

A) True 
 B)False

Question 11

Genetech, a biotechnology firm engaging in the new field of genetic engineering, has asked your advice about remaining independent and temporarily gaining access to the marketing and manufacturing expertise it lacks from another firm. You would suggest

Accepted Answer

A)  forming a limited-liability company.
B)  forming a joint venture.
C)  forming an S-corporation.
D)  merging with a company with the necessary expertise.
E)  starting a cooperative.F) B) and E)
G) A) and E)

Question 12

A general partner is responsible for any debts of the partnership, regardless of whether he or she was directly involved in the transaction that created the debt.

Accepted Answer

A) True 
 B)False

Question 13

Profits of a large corporation are taxed twice, once as corporate income and again as personal income of stockholders.

Accepted Answer

A) True 
 B)False

Question 14

What is a not-for-profit corporation? Discuss some of the similarities between not-for-profit corporations and for-profit corporations.

Accepted Answer

A not-for-profit corporation is a corpor...

Question 15

To close a sole proprietorship, the owner must

Accepted Answer

A)  notify the secretary of state.
B)  pay creditors.
C)  publish an out-of-business statement in the newspaper.
D)  have all licenses and permits revoked.
E)  do none of the above.F) A) and D)
G) A) and C)

Question 16

​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?

Accepted Answer

A)  ​Horizontal merger.
B)  ​Vertical merger.
C)  ​Conglomerate merger.
D)  ​Contingent merger.E) B) and C)
F) B) and D)

Question 17

A banker or lender is more likely to make sizable loans to a sole proprietor than to a partnership.

Accepted Answer

A) True 
 B)False

Question 18

​Maurice has been operating his business as a sole proprietorship but decides that it is too much work for him to do alone. He does not want to file a lot of government forms, but would like to bring in someone to own and operate it with him. Maurice needs a

Accepted Answer

A)  ​partner.
B)  ​wife.
C)  ​merger.
D)  ​limited-liability company.E) None of the above
F) A) and B)

Question 19

Unlike a person, a corporation exists only on paper.

Accepted Answer

A) True 
 B)False

Question 20

What are some of the disadvantages of partnerships? Are the disadvantages enough to dissuade you from forming this type of business ownership?

Accepted Answer

Answers will vary. Disadvantages of the ...

Exam 4: Choosing a Form of Business Ownership

To close a sole proprietorship, the owner must

Correct Answer
verified

Profits of a large corporation are taxed twice, once as corporate income and again as personal income of stockholders.

Correct Answer
verified

Unlike a person, a corporation exists only on paper.

Correct Answer
verified

A banker or lender is more likely to make sizable loans to a sole proprietor than to a partnership.

Correct Answer
verified

Legally, a partnership must

Correct Answer
verified

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

Correct Answer
verified

Maurice has been operating his business as a sole proprietorship but decides that it is too much work for him to do alone. He does not want to file a lot of government forms, but would like to bring in someone to own and operate it with him. Maurice needs a

Correct Answer
verified

How might a sole proprietorship have a possible tax advantage?

Correct Answer
verified

With regard to limited-liability companies, which of the following statements is false?

Correct Answer
verified

Most stockholders attend a corporation's annual meeting and vote in person.

Correct Answer
verified

Correct Answer
verified

A voluntary association of two or more people acting as co-owners of a business is known as a partnership.

Correct Answer
verified

Correct Answer
verified

What is a not-for-profit corporation? Discuss some of the similarities between not-for-profit corporations and for-profit corporations.

Correct Answer
verified
A not-for-profit corporation is a corpor...
View Answer

A general partner is responsible for any debts of the partnership, regardless of whether he or she was directly involved in the transaction that created the debt.

Correct Answer
verified

What are some of the disadvantages of partnerships? Are the disadvantages enough to dissuade you from forming this type of business ownership?

Correct Answer
verified
Answers will vary. Disadvantages of the ...
View Answer

Genetech, a biotechnology firm engaging in the new field of genetic engineering, has asked your advice about remaining independent and temporarily gaining access to the marketing and manufacturing expertise it lacks from another firm. You would suggest

Correct Answer
verified

Susan has a commercial laundry service that has been growing rapidly. She wants to continue to grow the business, but she needs access to more money and does not want to risk her personal assets. Susan contacts her lawyer to see if all the legal requirements are met to start the process of

Correct Answer
verified

Laura 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

With respect to combined business skills and knowledge, which of the following partnerships is best?

Correct Answer
verified

Exam 4: Choosing a Form of Business Ownership

To close a sole proprietorship, the owner must

Correct AnswerverifiedShow Answer

Profits of a large corporation are taxed twice, once as corporate income and again as personal income of stockholders.

Correct AnswerverifiedShow Answer

Unlike a person, a corporation exists only on paper.

Correct AnswerverifiedShow Answer

A banker or lender is more likely to make sizable loans to a sole proprietor than to a partnership.

Correct AnswerverifiedShow Answer

Legally, a partnership must

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

​Maurice has been operating his business as a sole proprietorship but decides that it is too much work for him to do alone. He does not want to file a lot of government forms, but would like to bring in someone to own and operate it with him. Maurice needs a

Correct AnswerverifiedShow Answer

How might a sole proprietorship have a possible tax advantage?

Correct AnswerverifiedShow Answer

With regard to limited-liability companies, which of the following statements is false?

Correct AnswerverifiedShow Answer

Most stockholders attend a corporation's annual meeting and vote in person.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A voluntary association of two or more people acting as co-owners of a business is known as a partnership.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is a not-for-profit corporation? Discuss some of the similarities between not-for-profit corporations and for-profit corporations.

Correct AnswerverifiedA not-for-profit corporation is a corpor...View AnswerShow Answer

A general partner is responsible for any debts of the partnership, regardless of whether he or she was directly involved in the transaction that created the debt.

Correct AnswerverifiedShow Answer

What are some of the disadvantages of partnerships? Are the disadvantages enough to dissuade you from forming this type of business ownership?

Correct AnswerverifiedAnswers will vary. Disadvantages of the ...View AnswerShow Answer

Genetech, a biotechnology firm engaging in the new field of genetic engineering, has asked your advice about remaining independent and temporarily gaining access to the marketing and manufacturing expertise it lacks from another firm. You would suggest

Correct AnswerverifiedShow Answer

Susan has a commercial laundry service that has been growing rapidly. She wants to continue to grow the business, but she needs access to more money and does not want to risk her personal assets. Susan contacts her lawyer to see if all the legal requirements are met to start the process of

Correct AnswerverifiedShow Answer

Laura 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

With respect to combined business skills and knowledge, which of the following partnerships is best?

Correct AnswerverifiedShow Answer

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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verified

Maurice has been operating his business as a sole proprietorship but decides that it is too much work for him to do alone. He does not want to file a lot of government forms, but would like to bring in someone to own and operate it with him. Maurice needs a

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A not-for-profit corporation is a corpor...
View Answer

Correct Answer
verified

Correct Answer
verified
Answers will vary. Disadvantages of the ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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