Question 1

A limited-liability company extends the concept of personal-asset protection to small-business owners.

Accepted Answer

A) True 
 B)False

Question 2

Judy Barnes, Betty Turley, and Bob Turner want to obtain limited liability for their business, but they want to avoid double taxation.Which type of business ownership would you recommend?

Accepted Answer

A)   regular corporation
B)   general partnership
C)   sole proprietorship
D)   S-corporation
E)   not-for-profit corporationF) None of the above
G) A) and D)

Question 3

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 4

The weakness of one partner may be offset by another partner's strength.

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

Question 6

Why does the IRS allow some corporations to use the S-corporation form of ownership?

Accepted Answer

The Internal Revenue Service (IRS) allow...

Question 7

Stephen 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?

Accepted Answer

A)   corporation
B)   partnership
C)   S-corporation
D)   flexible partnership
E)   sole proprietorshipF) C) and E)
G) B) and D)

Question 8

Mars, Inc., maker of M&Ms and other candy, is 100 percent owned by the Mars family and is therefore referred to as a(n)  _____.

Accepted Answer

A)   open corporation
B)   public corporation
C)   syndicate
D)   cooperative
E)   closed corporationF) A) and D)
G) C) and E)

Question 9

The purchase of one corporation by another is referred to as a _____.

Accepted Answer

A)   proxy
B)   cooperative
C)   joint venture
D)   syndicate
E)   mergerF) None of the above
G) A) and E)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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)  _____.

Accepted Answer

A)   syndicate
B)   cooperative
C)   conglomerate
D)   alliance
E)   vertical mergerF) A) and B)
G) B) and E)

Question 12

A _____ is a legal form listing issues to be decided at a stockholders' meeting and enabling stockholders to transfer their voting rights to some other individual or individuals.

Accepted Answer

A)   waiver
B)   rights transfer
C)   proxy
D)   voter registration
E)   dividendF) A) and B)
G) A) and C)

Question 13

Which of the following statements is true?

Accepted Answer

A)   Economists and financial analysts agree that mergers are good for the economy.
B)   Takeovers always increase a firm's productivity.
C)   Mergers in the first part of the twenty-first century will see an increase in debt financing.
D)   Mergers in the first part of the twenty-first century will be driven by cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.
E)   There will be fewer mergers that involve investors from other countries.F) C) and E)
G) B) and D)

Question 14

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

Accepted Answer

A)   par distribution
B)   dividend
C)   earnings per share
D)   distributed payment
E)   common paymentF) A) and D)
G) A) and C)

Question 15

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 pillF) A) and B)
G) A) and C)

Question 16

Describe the merger trends affecting American business.

Accepted Answer

In recent years, there has been a signif...

Question 17

A corporation is an artificial person created by law.

Accepted Answer

A) True 
 B)False

Question 18

Describe the advantages and disadvantages of the partnership form of ownership.

Accepted Answer

The partnership form of ownership has se...

Question 19

About 72 percent of all business firms in the United States are sole proprietorships.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

The concept of unlimited liability is a ...

Exam 4: Choosing a Form of Business Ownership

Stephen 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?

Correct AnswerverifiedShow Answer

Why does the IRS allow some corporations to use the S-corporation form of ownership?

Correct AnswerAnswered by ExamLex AIThe Internal Revenue Service (IRS) allow...View AnswerShow Answer

A _____ is a legal form listing issues to be decided at a stockholders' meeting and enabling stockholders to transfer their voting rights to some other individual or individuals.

Correct AnswerverifiedShow Answer

About 72 percent of all business firms in the United States are sole proprietorships.

Correct AnswerverifiedShow Answer

The weakness of one partner may be offset by another partner's strength.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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) _____.

Correct AnswerverifiedShow 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

A limited-liability company extends the concept of personal-asset protection to small-business owners.

Correct AnswerverifiedShow Answer

Mars, Inc., maker of M&Ms and other candy, is 100 percent owned by the Mars family and is therefore referred to as a(n) _____.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Judy Barnes, Betty Turley, and Bob Turner want to obtain limited liability for their business, but they want to avoid double taxation.Which type of business ownership would you recommend?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Describe the merger trends affecting American business.

Correct AnswerAnswered by ExamLex AIIn recent years, there has been a signif...View AnswerShow Answer

Describe the advantages and disadvantages of the partnership form of ownership.

Correct AnswerAnswered by ExamLex AIThe partnership form of ownership has se...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

A corporation is an artificial person created by law.

Correct AnswerverifiedShow Answer

The purchase of one corporation by another is referred to as a _____.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
Answered by ExamLex AI
The Internal Revenue Service (IRS) allow...
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
The concept of unlimited liability is a ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
In recent years, there has been a signif...
View Answer

Correct Answer
Answered by ExamLex AI
The partnership form of ownership has se...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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