Question 1

When starting a corporation, people submit articles of incorporation to

Accepted Answer

A)  a county judge. 
B)  a secretary of state. 
C)  the U.S. Attorney General. 
D)  the Department of Commerce. 
E)  the Small Business Administration. 
A)  a county judge. 
B)  a secretary of state. 
C)  the U.S. Attorney General. 
D)  the Department of Commerce. 
E)  the Small Business Administration.

Question 2

In all states besides the one 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 3

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 4

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

Accepted Answer

A) True 
 B)False

Question 5

All of the following are disadvantages of corporations except

Accepted Answer

A)  perpetual life. 
B)  double taxation. 
C)  lack of secrecy. 
D)  expensive formation. 
E)  heavy government regulation. 
A)  perpetual life. 
B)  double taxation. 
C)  lack of secrecy. 
D)  expensive formation. 
E)  heavy government regulation.

Question 6

A tender offer is an offer to purchase stock from existing stockholders.

Accepted Answer

A) True 
 B)False

Question 7

Because of unlimited liability, it is easy for sole proprietors to borrow large sums of money.

Accepted Answer

A) True 
 B)False

Question 8

All not-for-profit corporations rely solely on volunteers to perform services of the organization.

Accepted Answer

A) True 
 B)False

Question 9

Laura wants to start a business, but she is unsure of the legal form best for her. Short of cash, she has decided to take the form that is the least expensive and most flexible in terms of decision making and implementation. Which would you recommend?

Accepted Answer

A)  Joint venture 
B)  Partnership 
C)  Sole proprietorship 
D)  Cooperative 
E)  Corporation 
A)  Joint venture 
B)  Partnership 
C)  Sole proprietorship 
D)  Cooperative 
E)  Corporation

Question 10

Before Troy can incorporate his advertising business in Champaign, Illinois, he must have a(n) ____ approved by the ____.

Accepted Answer

A)  articles of incorporation; U.S. Corporate Business Administration 
B)  corporate charter; Champaign city mayor 
C)  agreement; Secretary of Commerce of the United States 
D)  articles of incorporation; stockholders 
E)  articles of incorporation; secretary of state of Illinois 
A)  articles of incorporation; U.S. Corporate Business Administration 
B)  corporate charter; Champaign city mayor 
C)  agreement; Secretary of Commerce of the United States 
D)  articles of incorporation; stockholders 
E)  articles of incorporation; secretary of state of Illinois

Question 11

Samantha's Dilemma
Samantha graduated from college and needed to decide where she wanted to work. She had several options. Her aunt Julie owned and operated a small business that she started about twenty years ago. Julie, an individual owner of her business, informed Samantha that she could work for her. On one hand, Samantha thought it would be a great opportunity to be able to work for her aunt, learn the business, and then run the business when her aunt retired. On the other hand, she also felt that she wanted something a little more challenging; a job where she could really use her education. Her other option would be to work for a company that a friend and her husband had started and jointly owned. It was a rapidly growing company with plenty of opportunity for advancement. However, Samantha had some reservations about this choice because she was not sure she wanted to work for friends. Her last option was to work for a large retail company, headquartered in Maryland, which had stores across the United States.
After much consideration, Samantha decided she didn't want an opportunity and a job because someone knew her. She wanted to prove how motivated and hard-working she was. Once she weighed all the advantages and disadvantages of her different options, she decided to work for the large retail company so that she could gain the most experience for herself.
-Refer to Samantha's Dilemma. Based on the information provided, what type of business does Samantha's aunt operate?

Accepted Answer

A)  Incorporation 
B)  Partnership 
C)  Franchise 
D)  Corporation 
E)  Sole proprietorship 
A)  Incorporation 
B)  Partnership 
C)  Franchise 
D)  Corporation 
E)  Sole proprietorship

Question 12

Local residents have always thought the small store on the corner of Locust and Congress was a partnership between John and Joe, two brothers from the neighborhood. But Joe is the real owner. This probably means that the store is a

Accepted Answer

A)  limited partnership. 
B)  sole proprietorship. 
C)  corporation. 
D)  cooperative. 
E)  joint venture. 
A)  limited partnership. 
B)  sole proprietorship. 
C)  corporation. 
D)  cooperative. 
E)  joint venture.

Question 13

Jack has been saving his excess funds for several years and has contemplated entering a partnership with a friend from college. Jack hesitates because he knows that it is ____ to invest money in a partnership and ____ to get the money back out.

Accepted Answer

A)  difficult; difficult 
B)  easy; difficult 
C)  easy; impossible 
D)  easy; easy 
E)  difficult; easy 
A)  difficult; difficult 
B)  easy; difficult 
C)  easy; impossible 
D)  easy; easy 
E)  difficult; easy

Question 14

Corporate officers are elected by the stockholders.

Accepted Answer

A) True 
 B)False

Question 15

All of the following are advantages of the partnership form of organization 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 16

Surplus funds of a not-for-profit organization are distributed to members of the board of directors.

Accepted Answer

A) True 
 B)False

Question 17

The amount paid for stock is the most a shareholder can lose in the corporate form of ownership.

Accepted Answer

A) True 
 B)False

Question 18

The form of business organization that accounts for just over 80 percent of all sales revenues in the United States is the

Accepted Answer

A)  sole proprietorship. 
B)  partnership. 
C)  corporation. 
D)  joint venture. 
E)  syndicate. 
A)  sole proprietorship. 
B)  partnership. 
C)  corporation. 
D)  joint venture. 
E)  syndicate.

Question 19

When Alyssa decides that she no longer wants her Radio Shack stock, she will discover that a related benefit of a corporation is

Accepted Answer

A)  the ease of transfer of ownership. 
B)  its perpetual life. 
C)  limited liability. 
D)  specialized management. 
E)  avoiding double taxation. 
A)  the ease of transfer of ownership. 
B)  its perpetual life. 
C)  limited liability. 
D)  specialized management. 
E)  avoiding double taxation.

Question 20

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.

Exam 4: Choosing a Form of Business Ownership

When starting a corporation, people submit articles of incorporation to

In all states besides the one in which it is incorporated, a business is known as 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)

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

All of the following are disadvantages of corporations except

A tender offer is an offer to purchase stock from existing stockholders.

Because of unlimited liability, it is easy for sole proprietors to borrow large sums of money.

All not-for-profit corporations rely solely on volunteers to perform services of the organization.

Laura wants to start a business, but she is unsure of the legal form best for her. Short of cash, she has decided to take the form that is the least expensive and most flexible in terms of decision making and implementation. Which would you recommend?

Before Troy can incorporate his advertising business in Champaign, Illinois, he must have a(n) ____ approved by the ____.

Local residents have always thought the small store on the corner of Locust and Congress was a partnership between John and Joe, two brothers from the neighborhood. But Joe is the real owner. This probably means that the store is a

Jack has been saving his excess funds for several years and has contemplated entering a partnership with a friend from college. Jack hesitates because he knows that it is ____ to invest money in a partnership and ____ to get the money back out.

Corporate officers are elected by the stockholders.

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

Surplus funds of a not-for-profit organization are distributed to members of the board of directors.

The amount paid for stock is the most a shareholder can lose in the corporate form of ownership.

The form of business organization that accounts for just over 80 percent of all sales revenues in the United States is the

When Alyssa decides that she no longer wants her Radio Shack stock, she will discover that a related benefit of a corporation is

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?

Exploring the World of Business and Economics

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

A: Exploring Global Business

B: Exploring Global Business

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

A: Creating and Pricing Products That Satisfy Customers

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Using Management and Accounting Information

Understanding Money, Banking, and Credit

Mastering Financial Management

A: Understanding Personal Finances and Investments

B: Understanding Personal Finances and Investments

Filters

Before Troy can incorporate his advertising business in Champaign, Illinois, he must have a(n) approved by the .

Jack has been saving his excess funds for several years and has contemplated entering a partnership with a friend from college. Jack hesitates because he knows that it is to invest money in a partnership and to get the money back out.