Question 1

Proprietorship is the most popular form of business in the United States.

Accepted Answer

A) True 
 B)False  True

Question 2

Differentiate between a general partnership and a limited partnership.

Accepted Answer

In a general partnership, each partner is known to the public and held liable for the acts of the other partners. In a limited partnership, there are one or more general partners and one or more limited partners, whose identity is not generally known. The firm is managed by the general partners, who have unlimited personal liability for the partnership's debt. The personal liability of the limited partners is limited to the amount of capital they have contributed. Limited partners may be employees of the company but may not participate in its management.

Question 3

Partnerships are more effective than proprietorships in raising funds.

Accepted Answer

A) True 
 B)False  True

Question 4

In a corporation, personal property of the owners can be taken to pay the debts of the business.

Accepted Answer

A) True 
 B)False

Question 5

A partnership is a business that is:

Accepted Answer

A)  formed for civic, educational, charitable, and religious purposes. 
B)  organized to provide a professional service for which each shareholder is licensed. 
C)  owned by two persons who have unlimited liability for its debts and obligations. 
D)  organized to protect individual partners from personal liability. 
A)  formed for civic, educational, charitable, and religious purposes. 
B)  organized to provide a professional service for which each shareholder is licensed. 
C)  owned by two persons who have unlimited liability for its debts and obligations. 
D)  organized to protect individual partners from personal liability.

Question 6

The board of directors conducts the day-to-day operations of the business.

Accepted Answer

A) True 
 B)False

Question 7

A buy-sell agreement details the terms by which stockholders can buy out each other's interest.

Accepted Answer

A) True 
 B)False

Question 8

What is a family limited partnership?

Accepted Answer

In a family limited partnership (FLP), t

Question 9

The partnership is easier to form, operate, and terminate than a proprietorship.

Accepted Answer

A) True 
 B)False

Question 10

In an S corporation, all shareholders must be individuals, estates, or some type of personal trust.

Accepted Answer

A) True 
 B)False

Question 11

In a limited partnership, the general partners have limited personal liability for the debts of the business.

Accepted Answer

A) True 
 B)False

Question 12

A _____ provides the protection of limited liability for shareholders, but its earnings are taxed at both the corporate and shareholder levels.

Accepted Answer

A)  cooperative 
B)  C corporation 
C)  nonprofit corporation 
D)  joint venture 
A)  cooperative 
B)  C corporation 
C)  nonprofit corporation 
D)  joint venture

Question 13

Which of the following is a characteristic of successful fractional ownership?

Accepted Answer

A)  The co-owners require a professional license. 
B)  The co-owners establish it for religious purposes. 
C)  The co-owners must be related to each other. 
D)  The co-owners must be honest in their dealings. 
A)  The co-owners require a professional license. 
B)  The co-owners establish it for religious purposes. 
C)  The co-owners must be related to each other. 
D)  The co-owners must be honest in their dealings.

Question 14

The main disadvantage of a corporation is double taxation.

Accepted Answer

A) True 
 B)False

Question 15

Once the choice of a legal form for a new business has been made, it cannot be changed until the business is dissolved or sold.

Accepted Answer

A) True 
 B)False

Question 16

Proprietorship is the oldest and most prevalent form of ownership in the United States.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is a characteristic of a nonprofit corporation?

Accepted Answer

A)  The trustees have unlimited liability status. 
B)  It enjoys tax-exempt status. 
C)  It is formed to provide a professional service. 
D)  It is owned by and operated for the benefit of patrons using its services. 
A)  The trustees have unlimited liability status. 
B)  It enjoys tax-exempt status. 
C)  It is formed to provide a professional service. 
D)  It is owned by and operated for the benefit of patrons using its services.

Question 18

Equal partnership is advisable in order to facilitate decision making.

Accepted Answer

A) True 
 B)False

Question 19

_____ is defined as a percentage share of an expensive asset and is most often used for aircraft, sports cars, and real property.

Accepted Answer

A)  Fractional ownership 
B)  Limited liability partnership 
C)  Joint venture 
D)  Limited partnership 
A)  Fractional ownership 
B)  Limited liability partnership 
C)  Joint venture 
D)  Limited partnership

Question 20

Which of the following factors should be considered when choosing the proper legal form for a business?

Accepted Answer

A)  Packaging of the product 
B)  Location of the factory 
C)  Earnings reinvestment 
D)  Name of the product 
A)  Packaging of the product 
B)  Location of the factory 
C)  Earnings reinvestment 
D)  Name of the product

Proprietorship is the most popular form of business in the United States.

Differentiate between a general partnership and a limited partnership.

Partnerships are more effective than proprietorships in raising funds.

In a corporation, personal property of the owners can be taken to pay the debts of the business.

A partnership is a business that is:

The board of directors conducts the day-to-day operations of the business.

A buy-sell agreement details the terms by which stockholders can buy out each other's interest.

What is a family limited partnership?

The partnership is easier to form, operate, and terminate than a proprietorship.

In an S corporation, all shareholders must be individuals, estates, or some type of personal trust.

In a limited partnership, the general partners have limited personal liability for the debts of the business.

A _____ provides the protection of limited liability for shareholders, but its earnings are taxed at both the corporate and shareholder levels.

Which of the following is a characteristic of successful fractional ownership?

The main disadvantage of a corporation is double taxation.

Once the choice of a legal form for a new business has been made, it cannot be changed until the business is dissolved or sold.

Proprietorship is the oldest and most prevalent form of ownership in the United States.

Which of the following is a characteristic of a nonprofit corporation?

Equal partnership is advisable in order to facilitate decision making.

_____ is defined as a percentage share of an expensive asset and is most often used for aircraft, sports cars, and real property.

Which of the following factors should be considered when choosing the proper legal form for a business?

Starting Your Small Business

Family-Owned Businesses

Maintaining Good Government Relations and Business Ethics

Becoming the Owner of a Small Business

Planning, Organizing, and Managing a Small Business

How to Obtain the Right Financing for Your Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Basic Financial Planning

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Risk Management, Insurance, and Crime Prevention

Filters

Exam 3: Forms of Ownership of Small Businesses

Proprietorship is the most popular form of business in the United States.

Differentiate between a general partnership and a limited partnership.

Partnerships are more effective than proprietorships in raising funds.

In a corporation, personal property of the owners can be taken to pay the debts of the business.

A partnership is a business that is:

The board of directors conducts the day-to-day operations of the business.

A buy-sell agreement details the terms by which stockholders can buy out each other's interest.

What is a family limited partnership?

The partnership is easier to form, operate, and terminate than a proprietorship.

In an S corporation, all shareholders must be individuals, estates, or some type of personal trust.

In a limited partnership, the general partners have limited personal liability for the debts of the business.

A _____ provides the protection of limited liability for shareholders, but its earnings are taxed at both the corporate and shareholder levels.

Which of the following is a characteristic of successful fractional ownership?

The main disadvantage of a corporation is double taxation.

Once the choice of a legal form for a new business has been made, it cannot be changed until the business is dissolved or sold.

Proprietorship is the oldest and most prevalent form of ownership in the United States.

Which of the following is a characteristic of a nonprofit corporation?

Equal partnership is advisable in order to facilitate decision making.

_____ is defined as a percentage share of an expensive asset and is most often used for aircraft, sports cars, and real property.

Which of the following factors should be considered when choosing the proper legal form for a business?

Starting Your Small Business

Family-Owned Businesses

Maintaining Good Government Relations and Business Ethics

Becoming the Owner of a Small Business

Planning, Organizing, and Managing a Small Business

How to Obtain the Right Financing for Your Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Basic Financial Planning

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Risk Management, Insurance, and Crime Prevention

Filters