Question 1

All of the following are disadvantages that Sean should consider before entering a partnership agreement with his cousin except

Accepted Answer

A)   lack of continuity.
B)   effects of disagreements with his cousin.
C)   the inability to get out the money he invests.
D)   unlimited liability.
E)   double taxation.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Assume that you are a corporate manager and that a corporate raider is trying to take over your company. What steps could you follow to avoid the takeover?

Accepted Answer

As a corporate manager, there are severa...

Question 4

Recently there have been several mergers involving Big Four accounting firms. One such merger involved the firms of Arthur Young and Ernst & Whinney, who combined to form Ernst & Young. This is an example of a

Accepted Answer

A)   joint venture.
B)   horizontal merger.
C)   vertical merger.
D)   syndicate.
E)   conglomerate merger.

Question 5

The retail card and gift shop chain that Heidi started has since been incorporated. Which of the following best describes the limited liability that Heidi has as the primary stockholder in this corporation?

Accepted Answer

A)   Heidi has no responsibility if the business fails and will still be able to get her initial investment back.
B)   Heidi may have to give up her car and house if the corporation fails in order to cover the debts of the corporation.
C)   The other stockholders will be able to seize Heidi's personal money but not her primary residence in the event that the business fails.
D)   Heidi's personal assets will be protected in the event that the corporation fails, although she could lose her entire investment.
E)   Heidi will only be liable for losses that develop from decisions she made about the daily business operations.

Question 6

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 7

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

Accepted Answer

A) True 
 B)False

Question 8

Joint ventures are created for a specific purpose and dissolved when that purpose is achieved.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following would least likely be stated in the articles of partnership?

Accepted Answer

A)   Who will make the final decisions
B)   How much each partner will invest
C)   What the duties of each partner are
D)   What products the company will sell
E)   What will happen if a partner dies or wants to dissolve the partnership

Question 10

Which of the following has a restriction on the number of owners, members, or stockholders?

Accepted Answer

A)   S-corporation
B)   Not-for-profit corporation
C)   Open corporation
D)   Limited-liability company
E)   Cooperative

Question 11

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.

Question 12

Why is the concept of unlimited liability a concern for the sole proprietor?

Accepted Answer

The concept of unlimited liability is a ...

Question 13

Financial experts agree that takeovers enhance corporate profitability and productivity.

Accepted Answer

A) True 
 B)False

Question 14

Glenn owns and operates a large hardware store in Missouri that employs about fifty people. He delegates some of the decision making to two managers, but he remains the only owner. Glenn's business is organized as a

Accepted Answer

A)   corporation.
B)   partnership.
C)   sole proprietorship.
D)   limited partnership.
E)   limited-liability corporation.

Question 15

Why do farmers join cooperatives?

Accepted Answer

Farmers join cooperatives for a variety ...

Question 16

Because of limited liability, individuals are more willing to invest in corporations than in other forms of business.

Accepted Answer

A) True 
 B)False

Question 17

Goodwill Industries is an example of a(n)

Accepted Answer

A)   LLC.
B)   syndicate.
C)   cooperative.
D)   not-for-profit corporation.
E)   S-corporation.

Question 18

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

Accepted Answer

A)   partnership.
B)   corporation.
C)   sole proprietorship.
D)   conglomerate.
E)   syndicate.

Question 19

A master limited partnership is taxed like a corporation.

Accepted Answer

A) True 
 B)False

Question 20

A ____ is a form that enables stockholders to allow someone else to vote for them.

Accepted Answer

A)   waiver
B)   rights transfer
C)   proxy
D)   voter registration
E)   dividend

Exam 4: Choosing a Form of Business Ownership

Assume that you are a corporate manager and that a corporate raider is trying to take over your company. What steps could you follow to avoid the takeover?

Correct AnswerAnswered by ExamLex AIAs a corporate manager, there are severa...View AnswerShow Answer

Why is the concept of unlimited liability a concern for the sole proprietor?

Correct AnswerAnswered by ExamLex AIThe concept of unlimited liability is a ...View AnswerShow Answer

The retail card and gift shop chain that Heidi started has since been incorporated. Which of the following best describes the limited liability that Heidi has as the primary stockholder in this corporation?

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

A ____ is a form that enables stockholders to allow someone else to vote for them.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Glenn owns and operates a large hardware store in Missouri that employs about fifty people. He delegates some of the decision making to two managers, but he remains the only owner. Glenn's business is organized as a

Correct AnswerverifiedShow Answer

Goodwill Industries is an example of a(n)

Correct AnswerverifiedShow Answer

Recently there have been several mergers involving Big Four accounting firms. One such merger involved the firms of Arthur Young and Ernst & Whinney, who combined to form Ernst & Young. This is an example of a

Correct AnswerverifiedShow Answer

Which of the following would least likely be stated in the articles of partnership?

Correct AnswerverifiedShow Answer

Because of limited liability, individuals are more willing to invest in corporations than in other forms of business.

Correct AnswerverifiedShow Answer

Joint ventures are created for a specific purpose and dissolved when that purpose is achieved.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Financial experts agree that takeovers enhance corporate profitability and productivity.

Correct AnswerverifiedShow Answer

All of the following are disadvantages that Sean should consider before entering a partnership agreement with his cousin except

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A master limited partnership is taxed like a corporation.

Correct AnswerverifiedShow Answer

Why do farmers join cooperatives?

Correct AnswerAnswered by ExamLex AIFarmers join cooperatives for a variety ...View AnswerShow Answer

Which of the following has a restriction on the number of owners, members, or stockholders?

Correct AnswerverifiedShow Answer

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As a corporate manager, there are severa...
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The concept of unlimited liability is a ...
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Answered by ExamLex AI
Farmers join cooperatives for a variety ...
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Correct Answer
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