Question 1

Compared to a sole proprietorship,which of the following is considered an advantage of a general partnership?

Accepted Answer

A) More financial resources. 
B) Limited liability for all owners. 
C) Equal division of profits among the owners. 
D) Ease and flexibility in transferring shares of ownership to others. 
A) More financial resources. 
B) Limited liability for all owners. 
C) Equal division of profits among the owners. 
D) Ease and flexibility in transferring shares of ownership to others.

Question 2

Jamie and Maria invested all their savings in a small pizzeria they opened outside the University of Western Ontario.They operated the business as a general partnership.After 11 months the business went broke and Jamie and Maria were left with outstanding bills of $37,500,which is more than their investment in the company.Jamie and Maria can:

Accepted Answer

A) lose their personal assets as the result of their company's financial problems. 
B) lose only the funds they originally invested in their company. 
C) lose only the total value of the assets actually used to operate the business. 
D) avoid any liability for these debts since a partnership is considered to be a business entity that is separate and distinct from the partners who own it. 
A) lose their personal assets as the result of their company's financial problems. 
B) lose only the funds they originally invested in their company. 
C) lose only the total value of the assets actually used to operate the business. 
D) avoid any liability for these debts since a partnership is considered to be a business entity that is separate and distinct from the partners who own it.

Question 3

The three major types of mergers are rectangular,triangular,and circular.

Accepted Answer

A) True 
 B)False

Question 4

Connie is a general partner in a retail cookie store.Her personal assets are protected from the debts of the business.

Accepted Answer

A) True 
 B)False

Question 5

In a franchise arrangement,ownership of all of the individual stores or outlets remains in the hands of the franchisor.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is normally considered a major disadvantage of the corporate form of business?

Accepted Answer

A) unlimited liability of owners. 
B) difficult transfer of ownership. 
C) limited life. 
D) double taxation of earnings. 
A) unlimited liability of owners. 
B) difficult transfer of ownership. 
C) limited life. 
D) double taxation of earnings.

Question 7

The earnings of corporations are taxed:

Accepted Answer

A) as income to the corporation,then again as income to the stockholders on earnings that are distributed as dividends. 
B) at twice the going rate of a partnership or proprietorship. 
C) by the federal government,but they are exempt from provincial taxes if the corporation owns any facilities within that province. 
D) as if the business were a partnership. 
A) as income to the corporation,then again as income to the stockholders on earnings that are distributed as dividends. 
B) at twice the going rate of a partnership or proprietorship. 
C) by the federal government,but they are exempt from provincial taxes if the corporation owns any facilities within that province. 
D) as if the business were a partnership.

Question 8

A ______________ merger unites firms at different stages of related businesses.

Accepted Answer

A) vertical 
B) horizontal 
C) diagonal 
D) conglomerate 
A) vertical 
B) horizontal 
C) diagonal 
D) conglomerate

Question 9

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

Accepted Answer

A) True 
 B)False

Question 10

Two of Rolanda's friends have approached her to see if she would like to join them in starting a new business.Rolanda is willing to invest money in the business and share in its profits,but she has no desire to be involved in the day-to-day management of the company.She is also very nervous about the risk of losing her personal assets.Rolanda's preferences suggest that she would like to see the business operated as a general partnership.

Accepted Answer

A) True 
 B)False

Question 11

A distinguishing feature of a co-operative is that it:

Accepted Answer

A) maintains a distinct separation between ownership and management. 
B) is only intended to operate for a limited period of time. 
C) is owned and operated by the people who use it. 
D) can have no more than 75 owners,all of whom must be citizens of Canada. 
A) maintains a distinct separation between ownership and management. 
B) is only intended to operate for a limited period of time. 
C) is owned and operated by the people who use it. 
D) can have no more than 75 owners,all of whom must be citizens of Canada.

Question 12

In order to protect all parties and minimize misunderstandings among partners,all terms of the partnership should be spelled out in writing.

Accepted Answer

A) True 
 B)False

Question 13

An attempt by employees,management,or a group of investors to purchase an organization primarily through borrowing is called a(n):

Accepted Answer

A) golden parachute. 
B) arbitrage agreement. 
C) factor transaction. 
D) leveraged buyout. 
A) golden parachute. 
B) arbitrage agreement. 
C) factor transaction. 
D) leveraged buyout.

Question 14

The legal authorization for a company to use the corporate format is known as the articles of incorporation.

Accepted Answer

A) True 
 B)False

Question 15

Taking a firm private involves an attempt to turn a profit-seeking corporation into a non-profit corporation in order to avoid a hostile takeover.

Accepted Answer

A) True 
 B)False

Question 16

Jim Wilson,a professional accountant,could choose to set up a professional corporation.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements about partnerships is the most accurate?

Accepted Answer

A) A partnership is simply a corporation with fewer than 100 owners. 
B) A major advantage of a partnership is that it offers owners limited liability. 
C) A major drawback of a partnership is that it is difficult to terminate. 
D) Partnerships are taxed at the lowest corporate tax rate. 
A) A partnership is simply a corporation with fewer than 100 owners. 
B) A major advantage of a partnership is that it offers owners limited liability. 
C) A major drawback of a partnership is that it is difficult to terminate. 
D) Partnerships are taxed at the lowest corporate tax rate.

Question 18

Wizbang Computers,Inc.,a major producer of personal computers,is considering a merger with MBI,a leading producer of microprocessors and other computer chips.Wizbang believes such a merger would give them a guaranteed source of needed components,and would enable them to have better control over quality.If this merger occurs,it would be an example of a horizontal merger.

Accepted Answer

A) True 
 B)False

Question 19

One of the major disadvantages of a sole proprietorship is the:

Accepted Answer

A) possibility of disagreements between owners. 
B) unlimited liability the owner has for the debts of the firm. 
C) fact that any income earned by this type of business is taxed twice. 
D) high cost of starting or ending the company. 
A) possibility of disagreements between owners. 
B) unlimited liability the owner has for the debts of the firm. 
C) fact that any income earned by this type of business is taxed twice. 
D) high cost of starting or ending the company.

Question 20

Corporate mergers are classified into three types.What are the three types,and how do they differ? Give an example of each type.

Accepted Answer

A vertical merger is the joining of two

Compared to a sole proprietorship,which of the following is considered an advantage of a general partnership?

The three major types of mergers are rectangular,triangular,and circular.

Connie is a general partner in a retail cookie store.Her personal assets are protected from the debts of the business.

In a franchise arrangement,ownership of all of the individual stores or outlets remains in the hands of the franchisor.

Which of the following is normally considered a major disadvantage of the corporate form of business?

The earnings of corporations are taxed:

A ______________ merger unites firms at different stages of related businesses.

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

A distinguishing feature of a co-operative is that it:

In order to protect all parties and minimize misunderstandings among partners,all terms of the partnership should be spelled out in writing.

An attempt by employees,management,or a group of investors to purchase an organization primarily through borrowing is called a(n):

The legal authorization for a company to use the corporate format is known as the articles of incorporation.

Taking a firm private involves an attempt to turn a profit-seeking corporation into a non-profit corporation in order to avoid a hostile takeover.

Jim Wilson,a professional accountant,could choose to set up a professional corporation.

Which of the following statements about partnerships is the most accurate?

One of the major disadvantages of a sole proprietorship is the:

Corporate mergers are classified into three types.What are the three types,and how do they differ? Give an example of each type.

Taking Risks and Making Profits Within the Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business

Ethics and Social Responsibility

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Understanding Employeemanagement Issues and Relations

Marketing: Building Customer and Stakeholder Relationships

Managing the Marketing Mix: Product, Price, Place, and Promotion

Understanding Accounting and Financial Information

Financial Management

The Financial Services Industry in Canada

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Exam 6: Forms of Business Ownership

Compared to a sole proprietorship,which of the following is considered an advantage of a general partnership?

The three major types of mergers are rectangular,triangular,and circular.

Connie is a general partner in a retail cookie store.Her personal assets are protected from the debts of the business.

In a franchise arrangement,ownership of all of the individual stores or outlets remains in the hands of the franchisor.

Which of the following is normally considered a major disadvantage of the corporate form of business?

The earnings of corporations are taxed:

A ______________ merger unites firms at different stages of related businesses.

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

A distinguishing feature of a co-operative is that it:

In order to protect all parties and minimize misunderstandings among partners,all terms of the partnership should be spelled out in writing.

An attempt by employees,management,or a group of investors to purchase an organization primarily through borrowing is called a(n):

The legal authorization for a company to use the corporate format is known as the articles of incorporation.

Taking a firm private involves an attempt to turn a profit-seeking corporation into a non-profit corporation in order to avoid a hostile takeover.

Jim Wilson,a professional accountant,could choose to set up a professional corporation.

Which of the following statements about partnerships is the most accurate?

One of the major disadvantages of a sole proprietorship is the:

Corporate mergers are classified into three types.What are the three types,and how do they differ? Give an example of each type.

Taking Risks and Making Profits Within the Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business

Ethics and Social Responsibility

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Understanding Employeemanagement Issues and Relations

Marketing: Building Customer and Stakeholder Relationships

Managing the Marketing Mix: Product, Price, Place, and Promotion

Understanding Accounting and Financial Information

Financial Management

The Financial Services Industry in Canada

Filters