Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Boeing is incorporated in Seattle,Washington.It has a large facility in Huntsville,Alabama,and is considered a(n)____ because it conducts business within Alabama.

Accepted Answer

A)  outsider 
B)  domestic corporation 
C)  foreign corporation 
D)  tax write-off 
E)  alien corporation 
A)  outsider 
B)  domestic corporation 
C)  foreign corporation 
D)  tax write-off 
E)  alien corporation

Question 3

Unlimited liability holds a sole proprietor personally responsible for all the debts of the business.

Accepted Answer

A) True 
 B)False

Question 4

A contract between a business and a state recognizing the business as an artificial person is known as the

Accepted Answer

A)  articles of partnership. 
B)  articles of incorporation. 
C)  S-corporation. 
D)  stock certificate. 
E)  proxy. 
A)  articles of partnership. 
B)  articles of incorporation. 
C)  S-corporation. 
D)  stock certificate. 
E)  proxy.

Question 5

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

Accepted Answer

A)  Automatically split the profits,with 50 percent for Sandra and 50 percent for Timmy. 
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 Sandra and 50 percent for Timmy. 
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 6

Jennifer Sands,Bethany Alexis,and Dave Walkerwant to obtain limited liability for their business,but they want to avoid double taxation.Which type of business ownership would you recommend?

Accepted Answer

A)  Regular corporation 
B)  General partnership 
C)  Sole proprietorship 
D)  S-corporation 
E)  Not-for-profit corporation 
A)  Regular corporation 
B)  General partnership 
C)  Sole proprietorship 
D)  S-corporation 
E)  Not-for-profit corporation

Question 7

Which of the following statements is true?

Accepted Answer

A)  Economists and financial analysts agree that mergers are good for the economy. 
B)  Takeovers always increase a firm's productivity. 
C)  Mergers in the first part of the twenty-first century will see an increase in debt financing. 
D)  Mergers in the first part of the twenty-first century will be driven by cash-rich companies looking to acquire businesses that will enhance their position in the marketplace. 
E)  There will be fewer mergers that involve investors from other countries. 
A)  Economists and financial analysts agree that mergers are good for the economy. 
B)  Takeovers always increase a firm's productivity. 
C)  Mergers in the first part of the twenty-first century will see an increase in debt financing. 
D)  Mergers in the first part of the twenty-first century will be driven by cash-rich companies looking to acquire businesses that will enhance their position in the marketplace. 
E)  There will be fewer mergers that involve investors from other countries.

Question 8

​If Pizza Hut and Papa John's Pizza united to become the new company of Papa's Hut,what transaction created the new company?

Accepted Answer

A)  ​Horizontal merger. 
B)  ​Vertical acquisition. 
C)  ​Horizontal melding. 
D)  ​Proxy war. 
A)  ​Horizontal merger. 
B)  ​Vertical acquisition. 
C)  ​Horizontal melding. 
D)  ​Proxy war.

Question 9

Why is the concept of unlimited liability a concern for the sole proprietor?

Accepted Answer

Unlimited liability is a legal concept t

Question 10

Hailey Wilson loves to cook and receives unqualified praise whenever she prepares a meal for someone.Encouraged by these compliments and eager to put her culinary talents to good use,Hailey decides to open a small neighborhood restaurant.Since she plans to maintain complete control of the business,she will most likely organize it as a

Accepted Answer

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

Question 11

Common stock carries all the following rights except the right to

Accepted Answer

A)  vote on changes to the corporate charter. 
B)  share in profits. 
C)  receive information about the corporation. 
D)  receive part of the profit before other classes of stock. 
E)  attend the annual stockholders' meeting. 
A)  vote on changes to the corporate charter. 
B)  share in profits. 
C)  receive information about the corporation. 
D)  receive part of the profit before other classes of stock. 
E)  attend the annual stockholders' meeting.

Question 12

When incorporating,a business

Accepted Answer

A)  may incorporate in any state it chooses. 
B)  must incorporate in the state in which its headquarters are located. 
C)  must incorporate in the state in which it does the most business. 
D)  must receive the secretary of state's permission to incorporate in any state other than the one in which its corporate headquarters will be located. 
E)  must do none of these answer choices. 
A)  may incorporate in any state it chooses. 
B)  must incorporate in the state in which its headquarters are located. 
C)  must incorporate in the state in which it does the most business. 
D)  must receive the secretary of state's permission to incorporate in any state other than the one in which its corporate headquarters will be located. 
E)  must do none of these answer choices.

Question 13

Which of the following statements is false?

Accepted Answer

A)  The main ingredient for growth is capital. 
B)  One way for a corporation to grow is to sell present products in new geographic locations. 
C)  When carefully planned and controlled,growth from within can have very little adverse effect on a firm. 
D)  There is no connection between growth and executive power,prestige,and reputation. 
E)  One way for a business to grow is to sell new but related products to its existing customer base. 
A)  The main ingredient for growth is capital. 
B)  One way for a corporation to grow is to sell present products in new geographic locations. 
C)  When carefully planned and controlled,growth from within can have very little adverse effect on a firm. 
D)  There is no connection between growth and executive power,prestige,and reputation. 
E)  One way for a business to grow is to sell new but related products to its existing customer base.

Question 14

Amy owns 100 shares of General Electric preferred stock.She wants to attend the annual stockholder meeting to cast her vote on company issues.Based on your knowledge from school,you caution Amy that

Accepted Answer

A)  people with fewer than 1,000 shares of stock cannot vote. 
B)  stockholders are not allowed to attend the annual meetings. 
C)  most preferred stock does not have voting rights. 
D)  only institutional investors are allowed to attend the meetings. 
E)  she can vote only by proxy and not in person. 
A)  people with fewer than 1,000 shares of stock cannot vote. 
B)  stockholders are not allowed to attend the annual meetings. 
C)  most preferred stock does not have voting rights. 
D)  only institutional investors are allowed to attend the meetings. 
E)  she can vote only by proxy and not in person.

Question 15

Not-for-profit organizations must meet specific guidelines in order to obtain tax-exempt status.These guidelines are structured by the

Accepted Answer

A)  board of directors. 
B)  U.S.Uniform Partnership Act. 
C)  U.S.Bureau of the Census. 
D)  Chamber of Commerce. 
E)  Internal Revenue Service. 
A)  board of directors. 
B)  U.S.Uniform Partnership Act. 
C)  U.S.Bureau of the Census. 
D)  Chamber of Commerce. 
E)  Internal Revenue Service.

Question 16

B&G,Inc.
​A year ago,Carl 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 realized it was a fairly common practice.He recognized that this was one of the advantages of this type of corporation.
​While the job was challenging,Carl 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,Carl felt that,considering his present financial situation,he had to continue working for B&G,Inc.A week later,Carl discovered there was going to be a merger between B&G,Inc.and one of its major competitors.Carl'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.Which of these features does not belong to this type of corporation?

Accepted Answer

A)  No double taxation 
B)  Management flexibility 
C)  Limited liability 
D)  Personal asset protection 
E)  Many Internal Revenue Service tax regulations 
A)  No double taxation 
B)  Management flexibility 
C)  Limited liability 
D)  Personal asset protection 
E)  Many Internal Revenue Service tax regulations

Question 17

Cooper wants to start a sports club to benefit inner-city children and teach them rock climbing,mountaineering,and other outdoor sports.He wants to take donations to support the club rather than sell stock.What business form would be best for this club?

Accepted Answer

A)  Not-for-profit corporation. 
B)  S-corporation. 
C)  Partnership. 
D)  Syndicate. 
A)  Not-for-profit corporation. 
B)  S-corporation. 
C)  Partnership. 
D)  Syndicate.

Question 18

Cronker Company,LLC,is a wholesale distributor of industrial packaging.A primary advantage that Cronker enjoys as an LLC that corporations do not have is

Accepted Answer

A)  ease of formation. 
B)  limited liability. 
C)  avoiding double taxation. 
D)  one class of outstanding stock. 
E)  income taxes. 
A)  ease of formation. 
B)  limited liability. 
C)  avoiding double taxation. 
D)  one class of outstanding stock. 
E)  income taxes.

Question 19

A limited-liability company is

Accepted Answer

A)  taxed like a corporation. 
B)  taxed like a partnership. 
C)  similar to a cooperative. 
D)  always used to organize charitable organizations. 
E)  the result of a horizontal merger. 
A)  taxed like a corporation. 
B)  taxed like a partnership. 
C)  similar to a cooperative. 
D)  always used to organize charitable organizations. 
E)  the result of a horizontal merger.

Question 20

The partner who can lose only what he or she has invested in a business is the

Accepted Answer

A)  general partner. 
B)  sole proprietor. 
C)  manager. 
D)  employee. 
E)  limited partner. 
A)  general partner. 
B)  sole proprietor. 
C)  manager. 
D)  employee. 
E)  limited partner.

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

Boeing is incorporated in Seattle,Washington.It has a large facility in Huntsville,Alabama,and is considered a(n)____ because it conducts business within Alabama.

Unlimited liability holds a sole proprietor personally responsible for all the debts of the business.

A contract between a business and a state recognizing the business as an artificial person is known as the

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

Jennifer Sands,Bethany Alexis,and Dave Walkerwant to obtain limited liability for their business,but they want to avoid double taxation.Which type of business ownership would you recommend?

Which of the following statements is true?

If Pizza Hut and Papa John's Pizza united to become the new company of Papa's Hut,what transaction created the new company?

Why is the concept of unlimited liability a concern for the sole proprietor?

Common stock carries all the following rights except the right to

When incorporating,a business

Which of the following statements is false?

Amy owns 100 shares of General Electric preferred stock.She wants to attend the annual stockholder meeting to cast her vote on company issues.Based on your knowledge from school,you caution Amy that

Not-for-profit organizations must meet specific guidelines in order to obtain tax-exempt status.These guidelines are structured by the

Cooper wants to start a sports club to benefit inner-city children and teach them rock climbing,mountaineering,and other outdoor sports.He wants to take donations to support the club rather than sell stock.What business form would be best for this club?

Cronker Company,LLC,is a wholesale distributor of industrial packaging.A primary advantage that Cronker enjoys as an LLC that corporations do not have is

A limited-liability company is

The partner who can lose only what he or she has invested in a business is the

Exploring the World of Business and Economics

Ethics and Social Responsibility in Business

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

Building Customer Relationships Through Effective Marketing

Creating and Pricing Products That Satisfy Customers

Distributing and Promoting Products

Exploring Social Media and E-Business

Using Management and Accounting Information

Mastering Financial Management

Understanding Personal Finances and Investments

Enhancing Union-Management Relations

Risk Management and Insurance

Business Law regulation and Taxation

Filters

Exam 4: Choosing a Form of Business Ownership

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

Boeing is incorporated in Seattle,Washington.It has a large facility in Huntsville,Alabama,and is considered a(n)____ because it conducts business within Alabama.

Unlimited liability holds a sole proprietor personally responsible for all the debts of the business.

A contract between a business and a state recognizing the business as an artificial person is known as the

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

Jennifer Sands,Bethany Alexis,and Dave Walkerwant to obtain limited liability for their business,but they want to avoid double taxation.Which type of business ownership would you recommend?

Which of the following statements is true?

​If Pizza Hut and Papa John's Pizza united to become the new company of Papa's Hut,what transaction created the new company?

Why is the concept of unlimited liability a concern for the sole proprietor?

Common stock carries all the following rights except the right to

When incorporating,a business

Which of the following statements is false?

Amy owns 100 shares of General Electric preferred stock.She wants to attend the annual stockholder meeting to cast her vote on company issues.Based on your knowledge from school,you caution Amy that

Not-for-profit organizations must meet specific guidelines in order to obtain tax-exempt status.These guidelines are structured by the

Cooper wants to start a sports club to benefit inner-city children and teach them rock climbing,mountaineering,and other outdoor sports.He wants to take donations to support the club rather than sell stock.What business form would be best for this club?

Cronker Company,LLC,is a wholesale distributor of industrial packaging.A primary advantage that Cronker enjoys as an LLC that corporations do not have is

A limited-liability company is

The partner who can lose only what he or she has invested in a business is the

Exploring the World of Business and Economics

Ethics and Social Responsibility in Business

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

Building Customer Relationships Through Effective Marketing

Creating and Pricing Products That Satisfy Customers

Distributing and Promoting Products

Exploring Social Media and E-Business

Using Management and Accounting Information

Mastering Financial Management

Understanding Personal Finances and Investments

Enhancing Union-Management Relations

Risk Management and Insurance

Business Law regulation and Taxation

Filters

If Pizza Hut and Papa John's Pizza united to become the new company of Papa's Hut,what transaction created the new company?