Question 1

An advantage of corporations in relation to partnerships is that

Accepted Answer

A)   corporations have tax advantages
B)   corporations have unlimited life
C)   shareholders have unlimited financial liability
D)   shareholders can transfer ownership easily

Question 2

Ownership of a corporation is measured in

Accepted Answer

A)   assets
B)   equity
C)   dividends
D)   shares D

Question 3

To form a corporation a charter is needed.

Accepted Answer

A) True 
 B)False

Question 4

An advantage of partnerships when compared to proprietorships is

Accepted Answer

A)   if one partner disagrees with a change, the partnership cannot make the change
B)   all partners are bound by all contracts made by the partnership
C)   operations are usually less efficient because of shared management
D)   more capital is usually available

Question 5

In which type of partnership is the liability of a partner limited to the amount of the partner's investment?

Accepted Answer

A)   limited partnership
B)   unlimited partnership
C)   restricted partnership
D)   unrestricted partnership

Question 6

Corporations usually have a tax advantage over partnerships.

Accepted Answer

A) True 
 B)False

Question 7

A corporation is authorized to act as if it were a single person by the

Accepted Answer

A)   federal government
B)   board of directors
C)   state in which it is incorporated
D)   business plan

Question 8

If assets are valued at $500,000 and capital amounts to $350,000, the liabilities of the business are

Accepted Answer

A)   $850,000
B)   $500,000
C)   $350,000
D)   $150,000

Question 9

A written agreement between two or more people identifying how they will add capital, labor, or other assets and divide any profits or share any losses in their business is called a

Accepted Answer

A)   certificate of incorporation
B)   business plan
C)   charter
D)   partnership agreement

Question 10

One of the main reasons many proprietorships fail within a short time is that

Accepted Answer

A)   the owner lacks needed skills
B)   the owner lacks interest in the business
C)   proprietorships are not able to compete with corporations any longer
D)   proprietorships are not able to compete with partnerships

Question 11

Each stockholder has only one vote regardless of the number of shares owned.

Accepted Answer

A) True 
 B)False

Question 12

A business with a balance sheet showing assets valued at $100,000 and capital valued at $100,000 is in a weak financial position.

Accepted Answer

A) True 
 B)False

Question 13

Match each item with the correct statement below.
-Money owed by a business.

Accepted Answer

A)  Assets
B)  balance sheet
C)  business plan
D)  Capital
E)  charterF) close corporationG) creditorsH) entrepreneurI) income statementJ) intrapreneurK) liabilitiesL) officerM) open corporationN) stockholders

Question 14

An agreement among two or more businesses to work together to provide a good or service is called a

Accepted Answer

A)   limited liability partnership
B)   limited liability corporation
C)   joint venture
D)   cooperative

Question 15

Match each item with the correct statement below.
-Owners of a corporation.

Accepted Answer

A)  Assets
B)  balance sheet
C)  business plan
D)  Capital
E)  charterF) close corporationG) creditorsH) entrepreneurI) income statementJ) intrapreneurK) liabilitiesL) officerM) open corporationN) stockholders N

Question 16

If a partner enters into a contract against the wishes of the other partners, the other partners are legally responsible for the contract.

Accepted Answer

A) True 
 B)False

Question 17

In a limited partnership

Accepted Answer

A)   all partners must be general partners
B)   no partners are liable for any of the partnership's debts
C)   all partners must be limited partners
D)   at least one partner must be a general partner with unlimited liability

Question 18

A corporation can make contracts, borrow money, and be sued.

Accepted Answer

A) True 
 B)False

Question 19

A stockholder has the same financial responsibility as a partner.

Accepted Answer

A) True 
 B)False  False

Question 20

It is difficult to withdraw from a partnership.

Accepted Answer

A) True 
 B)False

Exam 10: Managing the Form of Business Ownership

An advantage of corporations in relation to partnerships is that

Correct AnswerverifiedShow Answer

Ownership of a corporation is measured in

Correct AnswerverifiedD

To form a corporation a charter is needed.

Correct AnswerverifiedShow Answer

An advantage of partnerships when compared to proprietorships is

Correct AnswerverifiedShow Answer

In which type of partnership is the liability of a partner limited to the amount of the partner's investment?

Correct AnswerverifiedShow Answer

Corporations usually have a tax advantage over partnerships.

Correct AnswerverifiedShow Answer

A corporation is authorized to act as if it were a single person by the

Correct AnswerverifiedShow Answer

If assets are valued at $500,000 and capital amounts to $350,000, the liabilities of the business are

Correct AnswerverifiedShow Answer

A written agreement between two or more people identifying how they will add capital, labor, or other assets and divide any profits or share any losses in their business is called a

Correct AnswerverifiedShow Answer

One of the main reasons many proprietorships fail within a short time is that

Correct AnswerverifiedShow Answer

Each stockholder has only one vote regardless of the number of shares owned.

Correct AnswerverifiedShow Answer

A business with a balance sheet showing assets valued at $100,000 and capital valued at $100,000 is in a weak financial position.

Correct AnswerverifiedShow Answer

Match each item with the correct statement below. -Money owed by a business.

Correct AnswerverifiedShow Answer

An agreement among two or more businesses to work together to provide a good or service is called a

Correct AnswerverifiedShow Answer

Match each item with the correct statement below. -Owners of a corporation.

Correct AnswerverifiedN

If a partner enters into a contract against the wishes of the other partners, the other partners are legally responsible for the contract.

Correct AnswerverifiedShow Answer

In a limited partnership

Correct AnswerverifiedShow Answer

A corporation can make contracts, borrow money, and be sued.

Correct AnswerverifiedShow Answer

A stockholder has the same financial responsibility as a partner.

Correct AnswerverifiedFalse

It is difficult to withdraw from a partnership.

Correct AnswerverifiedShow Answer

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D

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N

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False

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