Question 1

Which of the following statements about the operation of a corporation is correct?

Accepted Answer

A)  A corporation is a separate entity and is legally formed under state laws. 
B)  A corporation automatically expires in 99 years and must be renewed if a corporation wants to remain in business. 
C)  Owners of a corporation have unlimited liability for any claims against their company. 
D)  A corporation tends to be much easier to set up than a sole proprietorship or partnership. 
E)  All profits and losses flow through the corporation owners' personal tax returns. 
A)  A corporation is a separate entity and is legally formed under state laws. 
B)  A corporation automatically expires in 99 years and must be renewed if a corporation wants to remain in business. 
C)  Owners of a corporation have unlimited liability for any claims against their company. 
D)  A corporation tends to be much easier to set up than a sole proprietorship or partnership. 
E)  All profits and losses flow through the corporation owners' personal tax returns.

Question 2

A(n)________ occurs when two companies of about the same size mutually agree to create a new combined company.

Accepted Answer

A)  merger 
B)  acquisition 
C)  takeover 
D)  synergy 
E)  cooperative 
A)  merger 
B)  acquisition 
C)  takeover 
D)  synergy 
E)  cooperative

Question 3

Which of the following is a benefit of forming a corporation?

Accepted Answer

A)  Corporations can be double taxed. 
B)  Owners of a corporation are passive investors. 
C)  Owners of a corporation are subject to unlimited liability. 
D)  Corporations can offer stock options to employees. 
E)  There is little paperwork to file when forming a corporation. 
A)  Corporations can be double taxed. 
B)  Owners of a corporation are passive investors. 
C)  Owners of a corporation are subject to unlimited liability. 
D)  Corporations can offer stock options to employees. 
E)  There is little paperwork to file when forming a corporation.

Question 4

A proxy fight occurs when a company attempts to persuade the target company's shareholders to replace the existing management with one that is ________ the goals of the acquiring company.

Accepted Answer

A)  unaware of 
B)  hostile toward 
C)  familiar with 
D)  sympathetic to 
E)  ambivalent about 
A)  unaware of 
B)  hostile toward 
C)  familiar with 
D)  sympathetic to 
E)  ambivalent about

Question 5

Limited liability companies are unable to offer stock options or stock bonus incentives to their employees because ________.

Accepted Answer

A)  benefits such as these are too costly for these types of start-up companies 
B)  extra profits are reinvested into the company, not into company stocks 
C)  limited liability companies do not have shareholders or stock 
D)  approval of stock benefits is difficult due to the number of members 
E)  LLC members are limited to just U.S. residents 
A)  benefits such as these are too costly for these types of start-up companies 
B)  extra profits are reinvested into the company, not into company stocks 
C)  limited liability companies do not have shareholders or stock 
D)  approval of stock benefits is difficult due to the number of members 
E)  LLC members are limited to just U.S. residents

Question 6

One disadvantage of sole proprietorship is the ________.

Accepted Answer

A)  possibility of disagreements between different owners 
B)  unlimited liability the owner has for the debts of the company 
C)  fact that any income earned by this type of business is taxed twice 
D)  cost of starting or ending the company is higher than other businesses 
E)  burden of all the required paperwork that must be filed 
A)  possibility of disagreements between different owners 
B)  unlimited liability the owner has for the debts of the company 
C)  fact that any income earned by this type of business is taxed twice 
D)  cost of starting or ending the company is higher than other businesses 
E)  burden of all the required paperwork that must be filed

Question 7

Companies MOST often resort to mergers and acquisitions when they want to expand their markets and product lines because ________.

Accepted Answer

A)  it minimizes conflicts that are rooted on hidden agendas and power struggles 
B)  it minimizes time and investment to research and develop new products 
C)  upper management prefers to concentrate on day-to-day activities 
D)  employees are motivated to work harder because of the resulting stability 
E)  more than 70 percent of all mergers exceed financial expectations 
A)  it minimizes conflicts that are rooted on hidden agendas and power struggles 
B)  it minimizes time and investment to research and develop new products 
C)  upper management prefers to concentrate on day-to-day activities 
D)  employees are motivated to work harder because of the resulting stability 
E)  more than 70 percent of all mergers exceed financial expectations

Question 8

Partnerships are taxed at the lowest corporate tax rate.

Accepted Answer

A) True 
 B)False

Question 9

A(n)________ acquisition occurs when one company tries to take control over another company against its wishes.

Accepted Answer

A)  proxy 
B)  hostile 
C)  horizontal 
D)  extension 
E)  conglomeration 
A)  proxy 
B)  hostile 
C)  horizontal 
D)  extension 
E)  conglomeration

Question 10

The biggest difference between general and limited partnerships involves who accepts most of the business liability.

Accepted Answer

A) True 
 B)False

Question 11

The profits of a sole proprietorship are taxed as the personal income of the owner.

Accepted Answer

A) True 
 B)False

Question 12

A corporation is a specific form of business that is legally formed under state laws and is considered a separate entity.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following tasks is NOT the responsibility of the board of directors?

Accepted Answer

A)  setting policies for the corporation 
B)  authorizing the issuance of stock 
C)  electing corporate officers 
D)  managing the company's daily operations 
E)  approving loans to and from the corporation 
A)  setting policies for the corporation 
B)  authorizing the issuance of stock 
C)  electing corporate officers 
D)  managing the company's daily operations 
E)  approving loans to and from the corporation

Question 14

Many citrus farmers and growers in the United States have direct and low-cost access to packing houses.As such,they are able to directly process their harvest through these packing houses,limiting the cost of production of packed citrus products.What attribute of a cooperative is shown in this situation?

Accepted Answer

Cooperatives provide services to members

Question 15

If you want to terminate your ownership in a publicly traded corporation,you simply sell your shares.

Accepted Answer

A) True 
 B)False

Question 16

A sole proprietorship is a common form of business ownership for start-up businesses.

Accepted Answer

A) True 
 B)False

Question 17

All of the following are reasons business owners consider using a corporation structure of ownership EXCEPT ________.

Accepted Answer

A)  the appearance of stability and legitimacy 
B)  protection from significant loss of personal assets 
C)  ease of forming and setting up the structure 
D)  eased ability of raising capital 
E)  ease of transferring ownership 
A)  the appearance of stability and legitimacy 
B)  protection from significant loss of personal assets 
C)  ease of forming and setting up the structure 
D)  eased ability of raising capital 
E)  ease of transferring ownership

Question 18

Many new business owners prefer a limited liability structure because there are ________.

Accepted Answer

A)  fewer corporate formalities 
B)  fewer lawsuits 
C)  typically higher profits than other forms of ownership 
D)  more informal agreements 
E)  limits on the number of members 
A)  fewer corporate formalities 
B)  fewer lawsuits 
C)  typically higher profits than other forms of ownership 
D)  more informal agreements 
E)  limits on the number of members

Question 19

When a not-for-profit corporations dissolves,its assets are ________.

Accepted Answer

A)  transferred to the federal government 
B)  distributed among major donors 
C)  passed to the owners' families 
D)  given to a similar not-for-profit group 
E)  seized by the state 
A)  transferred to the federal government 
B)  distributed among major donors 
C)  passed to the owners' families 
D)  given to a similar not-for-profit group 
E)  seized by the state

Question 20

Jenny and Rose are hairstylists that have decided to open their own salon by starting a general partnership.The first step to ensuring a successful partnership would be to ________.

Accepted Answer

A)  guarantee that they each have 25 clients to bring into the partnership 
B)  submit the partnership formation fee to the state 
C)  draw up a partnership agreement 
D)  submit the limited liability forms before they see clients 
E)  arrange for the special tax filing considerations a partnership requires 
A)  guarantee that they each have 25 clients to bring into the partnership 
B)  submit the partnership formation fee to the state 
C)  draw up a partnership agreement 
D)  submit the limited liability forms before they see clients 
E)  arrange for the special tax filing considerations a partnership requires

Which of the following statements about the operation of a corporation is correct?

A(n)________ occurs when two companies of about the same size mutually agree to create a new combined company.

Which of the following is a benefit of forming a corporation?

A proxy fight occurs when a company attempts to persuade the target company's shareholders to replace the existing management with one that is ________ the goals of the acquiring company.

Limited liability companies are unable to offer stock options or stock bonus incentives to their employees because ________.

One disadvantage of sole proprietorship is the ________.

Companies MOST often resort to mergers and acquisitions when they want to expand their markets and product lines because ________.

Partnerships are taxed at the lowest corporate tax rate.

A(n)________ acquisition occurs when one company tries to take control over another company against its wishes.

The biggest difference between general and limited partnerships involves who accepts most of the business liability.

The profits of a sole proprietorship are taxed as the personal income of the owner.

A corporation is a specific form of business that is legally formed under state laws and is considered a separate entity.

Which of the following tasks is NOT the responsibility of the board of directors?

If you want to terminate your ownership in a publicly traded corporation,you simply sell your shares.

A sole proprietorship is a common form of business ownership for start-up businesses.

All of the following are reasons business owners consider using a corporation structure of ownership EXCEPT ________.

Many new business owners prefer a limited liability structure because there are ________.

When a not-for-profit corporations dissolves,its assets are ________.

Jenny and Rose are hairstylists that have decided to open their own salon by starting a general partnership.The first step to ensuring a successful partnership would be to ________.

Business Basics

Economics and Banking

Ethics in Business

Business in a Global Economy

Small Business and the Entrepreneur

Business Management and Organization

Motivation, Leadership, and Teamwork

Human Resource Management

Online Business and Technology

Production, operations, and the Supply Chain

Marketing and Consumer Behavior

Product Development and Pricing Strategies

Promotion and Distribution

Financing and Tracking Business Operations

Investment Opportunities in the Securities Market

Business Law

Constructing an Effective Business Plan

Business Communications

Finding a Job

Personal Finance

Filters

Exam 6: Forms of Business Ownership

Which of the following statements about the operation of a corporation is correct?

A(n)________ occurs when two companies of about the same size mutually agree to create a new combined company.

Which of the following is a benefit of forming a corporation?

A proxy fight occurs when a company attempts to persuade the target company's shareholders to replace the existing management with one that is ________ the goals of the acquiring company.

Limited liability companies are unable to offer stock options or stock bonus incentives to their employees because ________.

One disadvantage of sole proprietorship is the ________.

Companies MOST often resort to mergers and acquisitions when they want to expand their markets and product lines because ________.

Partnerships are taxed at the lowest corporate tax rate.

A(n)________ acquisition occurs when one company tries to take control over another company against its wishes.

The biggest difference between general and limited partnerships involves who accepts most of the business liability.

The profits of a sole proprietorship are taxed as the personal income of the owner.

A corporation is a specific form of business that is legally formed under state laws and is considered a separate entity.

Which of the following tasks is NOT the responsibility of the board of directors?

If you want to terminate your ownership in a publicly traded corporation,you simply sell your shares.

A sole proprietorship is a common form of business ownership for start-up businesses.

All of the following are reasons business owners consider using a corporation structure of ownership EXCEPT ________.

Many new business owners prefer a limited liability structure because there are ________.

When a not-for-profit corporations dissolves,its assets are ________.

Jenny and Rose are hairstylists that have decided to open their own salon by starting a general partnership.The first step to ensuring a successful partnership would be to ________.

Business Basics

Economics and Banking

Ethics in Business

Business in a Global Economy

Small Business and the Entrepreneur

Business Management and Organization

Motivation, Leadership, and Teamwork

Human Resource Management

Online Business and Technology

Production, operations, and the Supply Chain

Marketing and Consumer Behavior

Product Development and Pricing Strategies

Promotion and Distribution

Financing and Tracking Business Operations

Investment Opportunities in the Securities Market

Business Law

Constructing an Effective Business Plan

Business Communications

Finding a Job

Personal Finance

Filters