Question 1

Which of the following is a key difference between a corporation and a sole proprietorship?

Accepted Answer

A)  Establishing a corporation is easier compared to establishing a proprietorship. 
B)  Unlike a corporation, a proprietorship is subject to double taxation. 
C)  Regulatory requirements are less severe for corporations than sole proprietorships. 
D)  Unlike a sole proprietorship, a corporation is subject to limited liability. 
E)  Establishing a sole proprietorship has complex legal requirements unlike a corporation. 
A)  Establishing a corporation is easier compared to establishing a proprietorship. 
B)  Unlike a corporation, a proprietorship is subject to double taxation. 
C)  Regulatory requirements are less severe for corporations than sole proprietorships. 
D)  Unlike a sole proprietorship, a corporation is subject to limited liability. 
E)  Establishing a sole proprietorship has complex legal requirements unlike a corporation.

Question 2

Partners are responsible for each other's action in a limited liability partnership.

Accepted Answer

A) True 
 B)False

Question 3

S corporation is a type of corporation that ________.

Accepted Answer

A)  combines limited liability of a corporation with the federal taxation advantages of a partnership 
B)  does not have such advantages as limited liability of investments 
C)  does not split the ownership into smaller units 
D)  files income tax returns in a country other than the country of operation 
E)  combines limited ownership of a proprietorship with the capital-raising options of a corporation 
A)  combines limited liability of a corporation with the federal taxation advantages of a partnership 
B)  does not have such advantages as limited liability of investments 
C)  does not split the ownership into smaller units 
D)  files income tax returns in a country other than the country of operation 
E)  combines limited ownership of a proprietorship with the capital-raising options of a corporation

Question 4

Robex Retail is a retail chain that has more than 390 stores in the United States.The directors of the company decide to launch operations in Italy to increase the company's market reach.Many of the shareholders think that this decision is not appropriate in light of the economic slowdown in Europe.A group of shareholders unite to pressurize the board of directors to change their decision.This is an example of ________.

Accepted Answer

A)  shareholder protection 
B)  shareholder activism 
C)  hostile takeover 
D)  corporate governance 
E)  shareholder resolution 
A)  shareholder protection 
B)  shareholder activism 
C)  hostile takeover 
D)  corporate governance 
E)  shareholder resolution

Question 5

A benefit corporation must pursue a stated non-financial goal.

Accepted Answer

A) True 
 B)False

Question 6

The chief operating officer is the highest-ranking officer of a corporation.

Accepted Answer

A) True 
 B)False

Question 7

Edwin runs an antique retail shop that is registered as a sole proprietorship.The liability exposure of Edwin's business ________.

Accepted Answer

A)  is limited to the amount he has invested on fixed assets 
B)  refers to the amount invested on variable assets 
C)  is more if the size of transactions is limited 
D)  refers to the total fixed investments made by him 
E)  is unlimited for the business's personal obligations 
A)  is limited to the amount he has invested on fixed assets 
B)  refers to the amount invested on variable assets 
C)  is more if the size of transactions is limited 
D)  refers to the total fixed investments made by him 
E)  is unlimited for the business's personal obligations

Question 8

Distinguish between strategic alliances and joint ventures.

Accepted Answer

While strategic alliances avoid much of

Question 9

A major advantage of partnerships is that they ________.

Accepted Answer

A)  do not require owners to take personal responsibility for their actions 
B)  provide limited liability protection to partners 
C)  have a straightforward income tax structure 
D)  are less vulnerable to conflicts between investors 
E)  allow investors to handle issues such as succession and termination better 
A)  do not require owners to take personal responsibility for their actions 
B)  provide limited liability protection to partners 
C)  have a straightforward income tax structure 
D)  are less vulnerable to conflicts between investors 
E)  allow investors to handle issues such as succession and termination better

Question 10

A vertical merger occurs when ________.

Accepted Answer

A)  a merger expands the geographic range of markets that it can serve 
B)  different stages or levels of the same industry unite 
C)  different companies at the same stage or level unite 
D)  a merger expands the mix of goods and services available for sale 
E)  two companies from unrelated industries unite to become a single company 
A)  a merger expands the geographic range of markets that it can serve 
B)  different stages or levels of the same industry unite 
C)  different companies at the same stage or level unite 
D)  a merger expands the mix of goods and services available for sale 
E)  two companies from unrelated industries unite to become a single company

Question 11

Which of the following statements is true of the liability of investors in a corporation?

Accepted Answer

A)  Majority investors are personally liable, whereas minority investors are not personally liable. 
B)  Investors have personal liability for the business transactions in corporations. 
C)  Investor's liability is limited to the amount invested in the corporation. 
D)  Investors are personally liable for transactions, whereas their property is not liable. 
E)  Investors' property is liable for the business transactions but investors are not personally liable. 
A)  Majority investors are personally liable, whereas minority investors are not personally liable. 
B)  Investors have personal liability for the business transactions in corporations. 
C)  Investor's liability is limited to the amount invested in the corporation. 
D)  Investors are personally liable for transactions, whereas their property is not liable. 
E)  Investors' property is liable for the business transactions but investors are not personally liable.

Question 12

A ________ is allowed to raise money by selling units of ownership to the general public in the same way corporations sell shares of stock to the public.

Accepted Answer

A)  master limited partnership 
B)  general partnership 
C)  sole proprietorship 
D)  unlimited proprietorship 
E)  limited liability partnership 
A)  master limited partnership 
B)  general partnership 
C)  sole proprietorship 
D)  unlimited proprietorship 
E)  limited liability partnership

Question 13

Compare and contrast private corporations and public corporations.

Accepted Answer

The stock of a private corporation,also

Question 14

Compare the three common types of mergers.

Accepted Answer

Vertical Merger occurs between different

Question 15

All partners have joint authority to make decisions for the firm in a general partnership.

Accepted Answer

A) True 
 B)False

Question 16

A corporation is a legal entity distinct from the persons running the corporation.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is an action that allows the companies to collaborate without formally combining?

Accepted Answer

A)  strategic alliance 
B)  joint venture 
C)  merger 
D)  acquisition 
E)  amalgamation 
A)  strategic alliance 
B)  joint venture 
C)  merger 
D)  acquisition 
E)  amalgamation

Question 18

A ________ merger occurs when different companies at the same stage or level merge.

Accepted Answer

A)  standardized 
B)  horizontal 
C)  conglomerate 
D)  vertical 
E)  operational 
A)  standardized 
B)  horizontal 
C)  conglomerate 
D)  vertical 
E)  operational

Question 19

A master limited partnership is not allowed to raise money by selling units of ownership to the general public.

Accepted Answer

A) True 
 B)False

Question 20

The number of shareholders is limited to fifty in a limited liability company.

Accepted Answer

A) True 
 B)False

Which of the following is a key difference between a corporation and a sole proprietorship?

Partners are responsible for each other's action in a limited liability partnership.

S corporation is a type of corporation that ________.

A benefit corporation must pursue a stated non-financial goal.

The chief operating officer is the highest-ranking officer of a corporation.

Edwin runs an antique retail shop that is registered as a sole proprietorship.The liability exposure of Edwin's business ________.

Distinguish between strategic alliances and joint ventures.

A major advantage of partnerships is that they ________.

A vertical merger occurs when ________.

Which of the following statements is true of the liability of investors in a corporation?

A ________ is allowed to raise money by selling units of ownership to the general public in the same way corporations sell shares of stock to the public.

Compare and contrast private corporations and public corporations.

Compare the three common types of mergers.

All partners have joint authority to make decisions for the firm in a general partnership.

A corporation is a legal entity distinct from the persons running the corporation.

Which of the following is an action that allows the companies to collaborate without formally combining?

A ________ merger occurs when different companies at the same stage or level merge.

A master limited partnership is not allowed to raise money by selling units of ownership to the general public.

The number of shareholders is limited to fifty in a limited liability company.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

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Exam 5: Forms of Ownership

Which of the following is a key difference between a corporation and a sole proprietorship?

Partners are responsible for each other's action in a limited liability partnership.

S corporation is a type of corporation that ________.

A benefit corporation must pursue a stated non-financial goal.

The chief operating officer is the highest-ranking officer of a corporation.

Edwin runs an antique retail shop that is registered as a sole proprietorship.The liability exposure of Edwin's business ________.

Distinguish between strategic alliances and joint ventures.

A major advantage of partnerships is that they ________.

A vertical merger occurs when ________.

Which of the following statements is true of the liability of investors in a corporation?

A ________ is allowed to raise money by selling units of ownership to the general public in the same way corporations sell shares of stock to the public.

Compare and contrast private corporations and public corporations.

Compare the three common types of mergers.

All partners have joint authority to make decisions for the firm in a general partnership.

A corporation is a legal entity distinct from the persons running the corporation.

Which of the following is an action that allows the companies to collaborate without formally combining?

A ________ merger occurs when different companies at the same stage or level merge.

A master limited partnership is not allowed to raise money by selling units of ownership to the general public.

The number of shareholders is limited to fifty in a limited liability company.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

Filters