Question 1

According to the textbook, the single most important thing the founders of an entrepreneurial venture can do is ________.

Accepted Answer

A)  start a board of advisors 
B)  establish business partnerships 
C)  make money 
D)  select a limited liability corporation as opposed to an S-corporation 
E)  establish a strong ethical culture for their firms 
A)  start a board of advisors 
B)  establish business partnerships 
C)  make money 
D)  select a limited liability corporation as opposed to an S-corporation 
E)  establish a strong ethical culture for their firms E

Question 2

A subchapter S corporation combines the advantages of a partnership and a C corporation.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following is NOT one of the four factors identified in the textbook as critical in selecting a form of business ownership?

Accepted Answer

A)  The cost of setting up and maintaining the legal form 
B)  The number and types of investors involved 
C)  Accounting considerations 
D)  Tax considerations 
E)  The extent to which personal assets can be shielded from the liabilities of the business 
A)  The cost of setting up and maintaining the legal form 
B)  The number and types of investors involved 
C)  Accounting considerations 
D)  Tax considerations 
E)  The extent to which personal assets can be shielded from the liabilities of the business C

Question 4

Mediation is the process in which an impartial third party helps those involved in a dispute reach an agreement.

Accepted Answer

A) True 
 B)False

Question 5

Stock options are a special form of incentive compensation.

Accepted Answer

A) True 
 B)False

Question 6

Very few businesses require licenses and permits to operate.

Accepted Answer

A) True 
 B)False

Question 7

A ________ combines the advantages of a partnership and a C corporation.

Accepted Answer

A)  subchapter S corporation 
B)  limited partnership 
C)  general partnership 
D)  sole proprietorship 
E)  subchapter K corporation 
A)  subchapter S corporation 
B)  limited partnership 
C)  general partnership 
D)  sole proprietorship 
E)  subchapter K corporation

Question 8

Corporations are organized as either ________ corporations or ________ corporations.

Accepted Answer

A)  permanent; temporary 
B)  general; limited 
C)  voluntary; statutory 
D)  C; subchapter S 
E)  regular; limited liability 
A)  permanent; temporary 
B)  general; limited 
C)  voluntary; statutory 
D)  C; subchapter S 
E)  regular; limited liability

Question 9

Describe the purpose of a nondisclosure agreement. Provide an example of when a nondisclosure agreement kicks in.

Accepted Answer

A nondisclosure agreement is a promise m

Question 10

It is usually easier for a corporation to raise investment capital than a sole proprietorship or a general partnership because the shareholders are not liable beyond their investment in the firm.

Accepted Answer

A) True 
 B)False

Question 11

The major difference between a general and a limited partnership is that a limited partnership includes two classes of owners-general and limited partners.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is NOT one of the standards that a business must meet to qualify for status as a subchapter S corporation?

Accepted Answer

A)  The business must be a subsidiary of another corporation. 
B)  All shareholders must agree to have the corporation formed as a subchapter S corporation. 
C)  It can have no more than 100 members (husbands and wives count as one member). 
D)  It can have only one class of stock issued and outstanding. 
E)  The shareholders must be U.S. citizens. 
A)  The business must be a subsidiary of another corporation. 
B)  All shareholders must agree to have the corporation formed as a subchapter S corporation. 
C)  It can have no more than 100 members (husbands and wives count as one member). 
D)  It can have only one class of stock issued and outstanding. 
E)  The shareholders must be U.S. citizens.

Question 13

Which of the following is NOT an advantage of a general partnership?

Accepted Answer

A)  Business losses can be deducted against the partners' other sources of income. 
B)  The skills and abilities of more than one individual are available to the firm. 
C)  The liquidity of each partner's investment is low. 
D)  Creating one is relatively easy and inexpensive compared to a C corporation or limited liability company. 
E)  It is not subject to double taxation. 
A)  Business losses can be deducted against the partners' other sources of income. 
B)  The skills and abilities of more than one individual are available to the firm. 
C)  The liquidity of each partner's investment is low. 
D)  Creating one is relatively easy and inexpensive compared to a C corporation or limited liability company. 
E)  It is not subject to double taxation.

Question 14

Which of the following statements is incorrect regarding common stock?

Accepted Answer

A)  Common stock is issued more narrowly than preferred stock. 
B)  The common stockholders have voting rights. 
C)  The common stockholders get paid after the creditors in the event of the liquidation of the corporation. 
D)  Common stock is the form of stock that most shareholders of a corporation own. 
E)  The common stockholders elect the board of directors. 
A)  Common stock is issued more narrowly than preferred stock. 
B)  The common stockholders have voting rights. 
C)  The common stockholders get paid after the creditors in the event of the liquidation of the corporation. 
D)  Common stock is the form of stock that most shareholders of a corporation own. 
E)  The common stockholders elect the board of directors.

Question 15

Partnerships are organized as either ________ or ________ partnerships.

Accepted Answer

A)  specific; general 
B)  narrow; broad 
C)  inward; outward 
D)  general; limited 
E)  partial; full 
A)  specific; general 
B)  narrow; broad 
C)  inward; outward 
D)  general; limited 
E)  partial; full

Question 16

A disadvantage of a sole proprietorship is that it is subject to double taxation.

Accepted Answer

A) True 
 B)False

Question 17

Describe what is meant by a "general partnership" and a "limited partnership." Describe the major difference between the two.

Accepted Answer

A general partnership is a form of busin

Question 18

The most important thing that any entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization is to hire an aggressive attorney.

Accepted Answer

A) True 
 B)False

Question 19

The simplest and most common form of business entity is the ________.

Accepted Answer

A)  sole proprietorship 
B)  general partnership 
C)  C corporation 
D)  limited liability company 
E)  subchapter S corporation 
A)  sole proprietorship 
B)  general partnership 
C)  C corporation 
D)  limited liability company 
E)  subchapter S corporation

Question 20

Which form of business ownership is a particularly poor choice for an aggressive entrepreneurial firm?

Accepted Answer

A)  C corporation 
B)  Sole proprietorship 
C)  Subchapter S corporation 
D)  Limited partnership 
E)  Limited liability corporation 
A)  C corporation 
B)  Sole proprietorship 
C)  Subchapter S corporation 
D)  Limited partnership 
E)  Limited liability corporation

According to the textbook, the single most important thing the founders of an entrepreneurial venture can do is ________.

A subchapter S corporation combines the advantages of a partnership and a C corporation.

Which of the following is NOT one of the four factors identified in the textbook as critical in selecting a form of business ownership?

Mediation is the process in which an impartial third party helps those involved in a dispute reach an agreement.

Stock options are a special form of incentive compensation.

Very few businesses require licenses and permits to operate.

A ________ combines the advantages of a partnership and a C corporation.

Corporations are organized as either corporations or corporations.

Describe the purpose of a nondisclosure agreement. Provide an example of when a nondisclosure agreement kicks in.

It is usually easier for a corporation to raise investment capital than a sole proprietorship or a general partnership because the shareholders are not liable beyond their investment in the firm.

The major difference between a general and a limited partnership is that a limited partnership includes two classes of owners-general and limited partners.

Which of the following is NOT one of the standards that a business must meet to qualify for status as a subchapter S corporation?

Which of the following is NOT an advantage of a general partnership?

Which of the following statements is incorrect regarding common stock?

Partnerships are organized as either or partnerships.

A disadvantage of a sole proprietorship is that it is subject to double taxation.

Describe what is meant by a "general partnership" and a "limited partnership." Describe the major difference between the two.

The most important thing that any entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization is to hire an aggressive attorney.

The simplest and most common form of business entity is the ________.

Which form of business ownership is a particularly poor choice for an aggressive entrepreneurial firm?

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Assessing a New Ventures Financial Strength and Viability

Building a New-Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

Exam 7: Preparing the Proper Ethical and Legal Foundation

According to the textbook, the single most important thing the founders of an entrepreneurial venture can do is ________.

A subchapter S corporation combines the advantages of a partnership and a C corporation.

Which of the following is NOT one of the four factors identified in the textbook as critical in selecting a form of business ownership?

Mediation is the process in which an impartial third party helps those involved in a dispute reach an agreement.

Stock options are a special form of incentive compensation.

Very few businesses require licenses and permits to operate.

A ________ combines the advantages of a partnership and a C corporation.

Corporations are organized as either ________ corporations or ________ corporations.

Describe the purpose of a nondisclosure agreement. Provide an example of when a nondisclosure agreement kicks in.

It is usually easier for a corporation to raise investment capital than a sole proprietorship or a general partnership because the shareholders are not liable beyond their investment in the firm.

The major difference between a general and a limited partnership is that a limited partnership includes two classes of owners-general and limited partners.

Which of the following is NOT one of the standards that a business must meet to qualify for status as a subchapter S corporation?

Which of the following is NOT an advantage of a general partnership?

Which of the following statements is incorrect regarding common stock?

Partnerships are organized as either ________ or ________ partnerships.

A disadvantage of a sole proprietorship is that it is subject to double taxation.

Describe what is meant by a "general partnership" and a "limited partnership." Describe the major difference between the two.

The most important thing that any entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization is to hire an aggressive attorney.

The simplest and most common form of business entity is the ________.

Which form of business ownership is a particularly poor choice for an aggressive entrepreneurial firm?

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Assessing a New Ventures Financial Strength and Viability

Building a New-Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

Corporations are organized as either corporations or corporations.

Partnerships are organized as either or partnerships.