Question 1

A voluntary association of two or more people acting as co-owners of a business is known as a partnership.

Accepted Answer

A) True 
 B)False

Question 2

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 3

In the state in which it is incorporated, a business is known as a(n)

Accepted Answer

A)  S-corporation. 
B)  resident corporation. 
C)  public corporation. 
D)  foreign corporation. 
E)  domestic corporation. 
A)  S-corporation. 
B)  resident corporation. 
C)  public corporation. 
D)  foreign corporation. 
E)  domestic corporation.

Question 4

A hostile takeover is a situation in which

Accepted Answer

A)  the management and board of directors of the targeted firm disapprove of the proposed merger. 
B)  stockholders are paid a golden parachute. 
C)  the targeted firm is dismantled to avoid the merger. 
D)  the government makes the decision that the corporate raider can purchase the targeted firm. 
E)  the corporate raider receives a sum of money to leave the targeted firm alone. 
A)  the management and board of directors of the targeted firm disapprove of the proposed merger. 
B)  stockholders are paid a golden parachute. 
C)  the targeted firm is dismantled to avoid the merger. 
D)  the government makes the decision that the corporate raider can purchase the targeted firm. 
E)  the corporate raider receives a sum of money to leave the targeted firm alone.

Question 5

The Smithsonian Institution exists to preserve historical and cultural items of value and to share those items with the public; it does not exist to maximise the wealth of any shareholders.This entity is organised as a(n)

Accepted Answer

A)  cooperative. 
B)  quasi-government corporation. 
C)  S-corporation. 
D)  not-for-profit corporation. 
E)  closed corporation. 
A)  cooperative. 
B)  quasi-government corporation. 
C)  S-corporation. 
D)  not-for-profit corporation. 
E)  closed corporation.

Question 6

Daniel, Thomas, and Lucas are partners in a law firm under a typical partnership agreement in which each owns an equal share of the business.Thomas dies suddenly of a heart attack.What will most likely become of the partnership?

Accepted Answer

A)  It will immediately cease to exist and Daniel and Lucas will have to find new jobs. 
B)  Thomas's share of the business will automatically be split between Daniel and Lucas. 
C)  Daniel and Lucas will be able to purchase Thomas's interest from his estate. 
D)  Daniel and Lucas will have to quickly find a new partner to take Thomas's place. 
E)  It will dissolve, and Daniel and Lucas will lose personal property to pay business debts. 
A)  It will immediately cease to exist and Daniel and Lucas will have to find new jobs. 
B)  Thomas's share of the business will automatically be split between Daniel and Lucas. 
C)  Daniel and Lucas will be able to purchase Thomas's interest from his estate. 
D)  Daniel and Lucas will have to quickly find a new partner to take Thomas's place. 
E)  It will dissolve, and Daniel and Lucas will lose personal property to pay business debts.

Question 7

Your friend Steve owns a considerable amount of ordinary share in Intel, the large microchip manufacturer.He wants to cast his votes on various issues at the annual stockholders' meeting, but he does not have the time to travel a great distance to the meeting.Instead of attending the meeting, Steve decides to register his votes by

Accepted Answer

A)  registered mail. 
B)  pre-emptive right. 
C)  proxy. 
D)  power of attorney. 
E)  preferred stock. 
A)  registered mail. 
B)  pre-emptive right. 
C)  proxy. 
D)  power of attorney. 
E)  preferred stock.

Question 8

What does double taxation mean?

Accepted Answer

A)  Companies must pay taxes on their income, and then employees must pay taxes on their salaries and wages. 
B)  Companies have to pay both sales taxes and income taxes. 
C)  Companies must pay taxes on their earnings, and then stockholders pay taxes on their dividends. 
D)  Suppliers tax their customers, and in turn these businesses tax the ultimate consumer. 
E)  Companies must pay taxes on corporate income and then additional taxes on distributions to profit stockholders. 
A)  Companies must pay taxes on their income, and then employees must pay taxes on their salaries and wages. 
B)  Companies have to pay both sales taxes and income taxes. 
C)  Companies must pay taxes on their earnings, and then stockholders pay taxes on their dividends. 
D)  Suppliers tax their customers, and in turn these businesses tax the ultimate consumer. 
E)  Companies must pay taxes on corporate income and then additional taxes on distributions to profit stockholders.

Question 9

Experts predict that mergers in the first part of the twenty-first century will be the result of cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.

Accepted Answer

A) True 
 B)False

Question 10

When the owner of a sole trader dies, what becomes of the business?

Accepted Answer

A)  The employees take over the business. 
B)  It ceases to exist unless the heirs take it over or sell it. 
C)  It is automatically auctioned to the highest bidder. 
D)  It ceases to exist, and no one may legally take it over. 
E)  It may continue existing but only under a new name. 
A)  The employees take over the business. 
B)  It ceases to exist unless the heirs take it over or sell it. 
C)  It is automatically auctioned to the highest bidder. 
D)  It ceases to exist, and no one may legally take it over. 
E)  It may continue existing but only under a new name.

Question 11

All of the following are advantages of the partnership form of organisation except

Accepted Answer

A)  unlimited liability. 
B)  retention of profits. 
C)  combined skills and knowledge. 
D)  better access to capital and credit. 
E)  ease of start-up. 
A)  unlimited liability. 
B)  retention of profits. 
C)  combined skills and knowledge. 
D)  better access to capital and credit. 
E)  ease of start-up.

Question 12

B&G, Inc.
A year ago, Kevin went to work for B&G, Inc.He has worked for the finance department ever since he started.He noticed that the corporation was only taxed as though it were a partnership.This was something that he found very odd when he first started working for the company, but he later realised it was a fairly common practice.He recognised that this was one of the advantages of this type of corporation.
While the job was challenging, Kevin was not happy.He wanted to work for a company whose main goal was to provide service to the community, not to make a profit.However, Kevin felt that, considering his present financial situation, he had to continue working for B&G, Inc.A week later, Kevin discovered there was going to be a merger between B&G, Inc.and one of its major competitors.Kevin's boss informed him that he would be getting a promotion and a raise.While he was excited about making more money, he still was not happy.He knew then that he would not be working for the company for long.
-Refer to B&G, Inc.B&G, Inc.was going through a ____ merger.

Accepted Answer

A)  Vertical 
B)  Horizontal 
C)  conglomerate 
D)  Hostile 
E)  Leveraged 
A)  Vertical 
B)  Horizontal 
C)  conglomerate 
D)  Hostile 
E)  Leveraged

Question 13

Lisa and John own a partnership that provides rental equipment for parties and special occasions.Which of the following is true about the way Lisa and John would handle company profits?

Accepted Answer

A)  Automatically split the profits, with 50 percent for Lisa and 50 percent for John. 
B)  They would do nothing because partnerships require that profits remain in the business. 
C)  Divide the profits according to each person's investment in the business. 
D)  Distribute the profits according to the terms of the partnership agreement. 
E)  Split the profits according to how many hours each person worked. 
A)  Automatically split the profits, with 50 percent for Lisa and 50 percent for John. 
B)  They would do nothing because partnerships require that profits remain in the business. 
C)  Divide the profits according to each person's investment in the business. 
D)  Distribute the profits according to the terms of the partnership agreement. 
E)  Split the profits according to how many hours each person worked.

Question 14

Brian wants to start a business that provides canoe and kayak trips.He decides that it would be better to ask his brother Brad to become his partner because

Accepted Answer

A)  one person could not possibly run this type of business. 
B)  Brian will receive all of the profits from the partnership. 
C)  together they will be able to get more capital and credit to start the business. 
D)  the business will pay less taxes than it would as a sole trader. 
E)  there are generally fewer control issues in a partnership than in a sole trader. 
A)  one person could not possibly run this type of business. 
B)  Brian will receive all of the profits from the partnership. 
C)  together they will be able to get more capital and credit to start the business. 
D)  the business will pay less taxes than it would as a sole trader. 
E)  there are generally fewer control issues in a partnership than in a sole trader.

Question 15

Recently there have been several mergers involving Big Four accounting firms.One such merger involved the firms of Arthur Young and Ernst & Whinney, who combined to form Ernst & Young.This is an example of a

Accepted Answer

A)  joint venture. 
B)  horizontal merger. 
C)  vertical merger. 
D)  syndicate. 
E)  conglomerate merger. 
A)  joint venture. 
B)  horizontal merger. 
C)  vertical merger. 
D)  syndicate. 
E)  conglomerate merger.

Question 16

The simplest form of business owned and operated by one person is called a(n)

Accepted Answer

A)  franchise. 
B)  partnership. 
C)  S-corporation. 
D)  sole trader. 
E)  syndicate. 
A)  franchise. 
B)  partnership. 
C)  S-corporation. 
D)  sole trader. 
E)  syndicate.

Question 17

The citizens of a number of small rural towns have decided to form an association that will allow them to purchase electricity at a much cheaper rate than they are currently paying.This alliance is referred to as a(n)

Accepted Answer

A)  joint venture. 
B)  syndicate. 
C)  cooperative. 
D)  private corporation. 
E)  S-corporation. 
A)  joint venture. 
B)  syndicate. 
C)  cooperative. 
D)  private corporation. 
E)  S-corporation.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

If Avon and Merck joined together to produce a cream that slows down the aging process, this would be called a(n)

Accepted Answer

A)  cooperative. 
B)  joint venture. 
C)  combined corporation. 
D)  S-corporation. 
E)  partnership. 
A)  cooperative. 
B)  joint venture. 
C)  combined corporation. 
D)  S-corporation. 
E)  partnership.

Question 20

A corporation is perhaps the easiest form of business to organise.

Accepted Answer

A) True 
 B)False

A voluntary association of two or more people acting as co-owners of a business is known as a partnership.

Since someone must be responsible for a partnership's debts, a limited partnership must have at least one general partner.

In the state in which it is incorporated, a business is known as a(n)

A hostile takeover is a situation in which

The Smithsonian Institution exists to preserve historical and cultural items of value and to share those items with the public; it does not exist to maximise the wealth of any shareholders.This entity is organised as a(n)

Daniel, Thomas, and Lucas are partners in a law firm under a typical partnership agreement in which each owns an equal share of the business.Thomas dies suddenly of a heart attack.What will most likely become of the partnership?

What does double taxation mean?

Experts predict that mergers in the first part of the twenty-first century will be the result of cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.

When the owner of a sole trader dies, what becomes of the business?

All of the following are advantages of the partnership form of organisation except

Lisa and John own a partnership that provides rental equipment for parties and special occasions.Which of the following is true about the way Lisa and John would handle company profits?

Brian wants to start a business that provides canoe and kayak trips.He decides that it would be better to ask his brother Brad to become his partner because

Recently there have been several mergers involving Big Four accounting firms.One such merger involved the firms of Arthur Young and Ernst & Whinney, who combined to form Ernst & Young.This is an example of a

The simplest form of business owned and operated by one person is called a(n)

The citizens of a number of small rural towns have decided to form an association that will allow them to purchase electricity at a much cheaper rate than they are currently paying.This alliance is referred to as a(n)

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

If Avon and Merck joined together to produce a cream that slows down the aging process, this would be called a(n)

A corporation is perhaps the easiest form of business to organise.

Introduction to Business

Responsible Business

Global Business

Small Business, Entrepreneurship, and Franchises

Leadership and Managing a Business

Flexibility Within the Organisation

Products and Services

Recruitment and Retaining the Best Employees

Employee Motivation and Team Building

The Marketing Concept

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Marketing Communications

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Introduction to Management Accounting

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Exam 4: Types of Business Ownership

A voluntary association of two or more people acting as co-owners of a business is known as a partnership.

Since someone must be responsible for a partnership's debts, a limited partnership must have at least one general partner.

In the state in which it is incorporated, a business is known as a(n)

A hostile takeover is a situation in which

The Smithsonian Institution exists to preserve historical and cultural items of value and to share those items with the public; it does not exist to maximise the wealth of any shareholders.This entity is organised as a(n)

Daniel, Thomas, and Lucas are partners in a law firm under a typical partnership agreement in which each owns an equal share of the business.Thomas dies suddenly of a heart attack.What will most likely become of the partnership?

What does double taxation mean?

Experts predict that mergers in the first part of the twenty-first century will be the result of cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.

When the owner of a sole trader dies, what becomes of the business?

All of the following are advantages of the partnership form of organisation except

Lisa and John own a partnership that provides rental equipment for parties and special occasions.Which of the following is true about the way Lisa and John would handle company profits?

Brian wants to start a business that provides canoe and kayak trips.He decides that it would be better to ask his brother Brad to become his partner because

Recently there have been several mergers involving Big Four accounting firms.One such merger involved the firms of Arthur Young and Ernst & Whinney, who combined to form Ernst & Young.This is an example of a

The simplest form of business owned and operated by one person is called a(n)

The citizens of a number of small rural towns have decided to form an association that will allow them to purchase electricity at a much cheaper rate than they are currently paying.This alliance is referred to as a(n)

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

If Avon and Merck joined together to produce a cream that slows down the aging process, this would be called a(n)

A corporation is perhaps the easiest form of business to organise.

Introduction to Business

Responsible Business

Global Business

Small Business, Entrepreneurship, and Franchises

Leadership and Managing a Business

Flexibility Within the Organisation

Products and Services

Recruitment and Retaining the Best Employees

Employee Motivation and Team Building

The Marketing Concept

Aproduct Development and Pricing Strategies

Marketing Channels

Marketing Communications

Social Media and E-Business

Introduction to Management Accounting

Money and the Banking System

Financial Management

Personal Finances and Investments

Filters