Question 1

All of the following EXCEPT ________ would be an advantage to partnership.

Accepted Answer

A)  pooled skills 
B)  increased financial resources 
C)  increased available time 
D)  unlimited liability 
E)  no separate tax return required 
A)  pooled skills 
B)  increased financial resources 
C)  increased available time 
D)  unlimited liability 
E)  no separate tax return required

Question 2

S corporations are restricted to a limited number of owners,whereas limited liability companies can have an unlimited number of owners.

Accepted Answer

A) True 
 B)False

Question 3

What is a C corporation and what are the advantages of this type of business ownership?

Accepted Answer

A C corporation is a form of business or

Question 4

All mergers and acquisitions are mutually desired by both companies.

Accepted Answer

A) True 
 B)False

Question 5

Melissa and Claudia are considering becoming business partners and establishing a clothing boutique.They agree that they need to have a partnership agreement before they start the business.What factors should Melissa and Claudia consider when writing their partnership agreement?

Accepted Answer

Melissa and Claudia should consider the

Question 6

Compared to the C corporation,the limited liability company is an attractive form of business ownership because ________.

Accepted Answer

A)  a limited liability company may be more expensive to form but it has a longer life than a C corporation 
B)  a limited liability company allows only one owner, whereas a C corporation requires over 100 owners 
C)  a limited liability company provides owners with protection of their personal assets; whereas C corporation owner's personal assets are at risk 
D)  a limited liability company does not require the firm to hold annual meetings and it can avoid double taxation 
E)  a limited liability company issues stock, while in a C corporation each member's ownership is determined by the value of their capital account 
A)  a limited liability company may be more expensive to form but it has a longer life than a C corporation 
B)  a limited liability company allows only one owner, whereas a C corporation requires over 100 owners 
C)  a limited liability company provides owners with protection of their personal assets; whereas C corporation owner's personal assets are at risk 
D)  a limited liability company does not require the firm to hold annual meetings and it can avoid double taxation 
E)  a limited liability company issues stock, while in a C corporation each member's ownership is determined by the value of their capital account

Question 7

Policies regarding all of the following points should be included in a partnership agreement EXCEPT ________.

Accepted Answer

A)  division of stock 
B)  capital contribution 
C)  shares of profits or losses 
D)  decision-making process 
E)  departure of partners 
A)  division of stock 
B)  capital contribution 
C)  shares of profits or losses 
D)  decision-making process 
E)  departure of partners

Question 8

An advantage of S corporations over C corporations is they avoid double taxation.Explain how this works.

Accepted Answer

In a C corporation,profits are taxed thr

Question 9

Which of the following moves would MOST likely initiate a hostile takeover?

Accepted Answer

A)  The buying company offers to buy the target company's stocks at a price higher than their current value. 
B)  The buying company delivers an ultimatum to the target company's shareholders to give up their shares. 
C)  The target company's shareholders offer their company's stocks at an attractive rate to the buying company. 
D)  The target company's shareholders agree to sell their company's stocks all at the same time. 
E)  The acquiring company offers to buy the target company's stock at a lower price, indicating the vulnerability of the target. 
A)  The buying company offers to buy the target company's stocks at a price higher than their current value. 
B)  The buying company delivers an ultimatum to the target company's shareholders to give up their shares. 
C)  The target company's shareholders offer their company's stocks at an attractive rate to the buying company. 
D)  The target company's shareholders agree to sell their company's stocks all at the same time. 
E)  The acquiring company offers to buy the target company's stock at a lower price, indicating the vulnerability of the target.

Question 10

Leslie is excited to begin a personal shopping business.She is planning to have employees and is concerned about losing personal assets should something happen to the business.She would like to focus on profits and building a business but she does not want her business to pay its own taxes.What ownership structure is Leslie's best choice?

Accepted Answer

A)  sole proprietor 
B)  C corporation 
C)  S corporation 
D)  cooperative 
E)  limited partnership 
A)  sole proprietor 
B)  C corporation 
C)  S corporation 
D)  cooperative 
E)  limited partnership

Question 11

The organizational structure of a corporation allows for shareholders to have control over the company's daily operations.

Accepted Answer

A) True 
 B)False

Question 12

As a shareholder of an S corporation,Dave is entitled to a profit proportionate to his interest in the corporation.How would Dave pay his taxes for the profits from his shares in the S corporation?

Accepted Answer

As a shareholder of an S corporation,Dav

Question 13

Alex and Bailey opened a dance studio together as general partners.They each invested $10,000 of their personal savings.After one year in business,they decided to close the doors.Their partnership agreement said they would divide profits and losses 50/50.They have more debt than assets.Alex and Bailey will each ________.

Accepted Answer

A)  lose only $10,000, the amount they invested since they agreed to share profits and losses 50/50 
B)  lose only $5,000, half the amount they invested, since they agreed to share profits and losses 50/50 
C)  collect the debt from their former customers since the customers accepted responsibility for the business when they purchased services 
D)  avoid any liability for the debt since a partnership is considered to be a separate entity from the partners who own it 
E)  lose personal assets to repay the debt since a partnership is not considered to be a separate entity from the partners who own it 
A)  lose only $10,000, the amount they invested since they agreed to share profits and losses 50/50 
B)  lose only $5,000, half the amount they invested, since they agreed to share profits and losses 50/50 
C)  collect the debt from their former customers since the customers accepted responsibility for the business when they purchased services 
D)  avoid any liability for the debt since a partnership is considered to be a separate entity from the partners who own it 
E)  lose personal assets to repay the debt since a partnership is not considered to be a separate entity from the partners who own it

Question 14

A merger involving a computer manufacturer and an electronics retailer that sells its computers would be an example of a ________.

Accepted Answer

A)  vertical merger 
B)  horizontal merger 
C)  product extension merger 
D)  conglomeration 
E)  market extension merger 
A)  vertical merger 
B)  horizontal merger 
C)  product extension merger 
D)  conglomeration 
E)  market extension merger

Question 15

After a successful five years,Double Z,LLC (a retirement ranch for race horses)thinks it may be able to attract donations from animal activist groups and even the federal government if it becomes a not-for-profit corporation.Explain what changes the owners of Double Z would need to make in order to be a not-for-profit corporation?

Accepted Answer

If Double Z decides to change its form o

Question 16

Henry decides to become a member of a limited liability company (LLC).What will happen to the company if Henry withdraws his membership and invests in other businesses?

Accepted Answer

If Henry decides to withdraw his members

Question 17

In a general partnership,all partners are guaranteed an equal share of the firm's profits.

Accepted Answer

A) True 
 B)False

Question 18

Emily wants to open a chain of sandwich shops and hopes to attract investors to help finance growth.She considered forming a C corporation but wants to have more flexibility about how the new business will be taxed.She also wants to offer investors limited liability.What form of ownership will best meet Emily's objectives?

Accepted Answer

A limited liability company would be the

Question 19

Not-for-profit organizations may NOT earn a profit.

Accepted Answer

A) True 
 B)False

Question 20

Unlimited liability with respect to business ownership means ________.

Accepted Answer

A)  to have an obligation to pay all business debt 
B)  to have an obligation to pay only the money you invest in a business 
C)  to be liable for expenses incurred only by you, not your employees 
D)  to be liable for estimated business expenses only 
E)  to have an obligation to perform all the roles in the company 
A)  to have an obligation to pay all business debt 
B)  to have an obligation to pay only the money you invest in a business 
C)  to be liable for expenses incurred only by you, not your employees 
D)  to be liable for estimated business expenses only 
E)  to have an obligation to perform all the roles in the company

All of the following EXCEPT ________ would be an advantage to partnership.

S corporations are restricted to a limited number of owners,whereas limited liability companies can have an unlimited number of owners.

What is a C corporation and what are the advantages of this type of business ownership?

All mergers and acquisitions are mutually desired by both companies.

Melissa and Claudia are considering becoming business partners and establishing a clothing boutique.They agree that they need to have a partnership agreement before they start the business.What factors should Melissa and Claudia consider when writing their partnership agreement?

Compared to the C corporation,the limited liability company is an attractive form of business ownership because ________.

Policies regarding all of the following points should be included in a partnership agreement EXCEPT ________.

An advantage of S corporations over C corporations is they avoid double taxation.Explain how this works.

Which of the following moves would MOST likely initiate a hostile takeover?

The organizational structure of a corporation allows for shareholders to have control over the company's daily operations.

As a shareholder of an S corporation,Dave is entitled to a profit proportionate to his interest in the corporation.How would Dave pay his taxes for the profits from his shares in the S corporation?

A merger involving a computer manufacturer and an electronics retailer that sells its computers would be an example of a ________.

Henry decides to become a member of a limited liability company (LLC).What will happen to the company if Henry withdraws his membership and invests in other businesses?

In a general partnership,all partners are guaranteed an equal share of the firm's profits.

Not-for-profit organizations may NOT earn a profit.

Unlimited liability with respect to business ownership means ________.

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

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Exam 6: Forms of Business Ownership

All of the following EXCEPT ________ would be an advantage to partnership.

S corporations are restricted to a limited number of owners,whereas limited liability companies can have an unlimited number of owners.

What is a C corporation and what are the advantages of this type of business ownership?

All mergers and acquisitions are mutually desired by both companies.

Melissa and Claudia are considering becoming business partners and establishing a clothing boutique.They agree that they need to have a partnership agreement before they start the business.What factors should Melissa and Claudia consider when writing their partnership agreement?

Compared to the C corporation,the limited liability company is an attractive form of business ownership because ________.

Policies regarding all of the following points should be included in a partnership agreement EXCEPT ________.

An advantage of S corporations over C corporations is they avoid double taxation.Explain how this works.

Which of the following moves would MOST likely initiate a hostile takeover?

The organizational structure of a corporation allows for shareholders to have control over the company's daily operations.

As a shareholder of an S corporation,Dave is entitled to a profit proportionate to his interest in the corporation.How would Dave pay his taxes for the profits from his shares in the S corporation?

A merger involving a computer manufacturer and an electronics retailer that sells its computers would be an example of a ________.

Henry decides to become a member of a limited liability company (LLC).What will happen to the company if Henry withdraws his membership and invests in other businesses?

In a general partnership,all partners are guaranteed an equal share of the firm's profits.

Not-for-profit organizations may NOT earn a profit.

Unlimited liability with respect to business ownership means ________.

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