Question 1

Owner has limited personal liability for the business's financial obligations in sole proprietorships.

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following is a key disadvantage of mergers and acquisitions?

Accepted Answer

A)  They limit the market reach of the companies involved. 
B)  They reduce the chances of cross-selling products. 
C)  They reduce the bargaining power of the companies. 
D)  They might present issues related to cultural harmony. 
E)  They limit the geographic range of the companies involved. 
A)  They limit the market reach of the companies involved. 
B)  They reduce the chances of cross-selling products. 
C)  They reduce the bargaining power of the companies. 
D)  They might present issues related to cultural harmony. 
E)  They limit the geographic range of the companies involved. D

Question 3

In the United States,a corporation is called a domestic corporation if it ________.

Accepted Answer

A)  does business only in the state where it is chartered 
B)  files income taxes with the U.S. government 
C)  does business only within the United States 
D)  has more than 5 subsidiaries in the United States 
E)  has incorporated its business in any of the U.S. states 
A)  does business only in the state where it is chartered 
B)  files income taxes with the U.S. government 
C)  does business only within the United States 
D)  has more than 5 subsidiaries in the United States 
E)  has incorporated its business in any of the U.S. states A

Question 4

Which of the following is a key advantage that corporations have over sole proprietorships and partnerships?

Accepted Answer

A)  Management is less likely to lose control of operations in corporations than proprietorships and partnerships. 
B)  Reporting requirements of corporations are simpler than sole proprietorships and partnerships. 
C)  Forming corporations involves less cost over sole proprietorships and partnerships. 
D)  Investments in corporations have more liquidity than partnerships and sole proprietorships. 
E)  Corporations have a less complex structure compared to sole proprietorships and partnerships. 
A)  Management is less likely to lose control of operations in corporations than proprietorships and partnerships. 
B)  Reporting requirements of corporations are simpler than sole proprietorships and partnerships. 
C)  Forming corporations involves less cost over sole proprietorships and partnerships. 
D)  Investments in corporations have more liquidity than partnerships and sole proprietorships. 
E)  Corporations have a less complex structure compared to sole proprietorships and partnerships.

Question 5

You work for a European company that is planning to launch business in the United States.The firm is planning to incorporate the new business as a partnership with a domestic firm in the U.S.Present the arguments for changing the company's decision and incorporating the business as a corporation.

Accepted Answer

The students should present arguments fo

Question 6

In a(n)________,two companies join to form a single entity either by pooling their resources or by one company purchasing the assets of the other.

Accepted Answer

A)  limited partnership 
B)  acquisition 
C)  merger 
D)  joint venture 
E)  strategic alliance 
A)  limited partnership 
B)  acquisition 
C)  merger 
D)  joint venture 
E)  strategic alliance

Question 7

In a(n)________,one company simply buys a controlling interest in the voting stock of another company.

Accepted Answer

A)  limited partnership 
B)  consolidation 
C)  acquisition 
D)  joint venture 
E)  strategic alliance 
A)  limited partnership 
B)  consolidation 
C)  acquisition 
D)  joint venture 
E)  strategic alliance

Question 8

Establishing a corporation is more complicated and expensive compared to establishing a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 9

Liquidity is a measure of how easily and quickly an asset can be converted into cash.

Accepted Answer

A) True 
 B)False

Question 10

Eurotec,a manufacturer of security systems in Italy,merges with a company in China to expand its reach.This is an example of a ________ merger.

Accepted Answer

A)  product-extension 
B)  vertical 
C)  conglomerate 
D)  retail 
E)  market-extension 
A)  product-extension 
B)  vertical 
C)  conglomerate 
D)  retail 
E)  market-extension

Question 11

A major advantage of partnerships is that they ________.

Accepted Answer

A)  do not require owners to take personal responsibility for their actions 
B)  provide limited liability protection to partners 
C)  have a straightforward income tax structure 
D)  are less vulnerable to conflicts between investors 
E)  allow investors to handle issues such as succession and termination better 
A)  do not require owners to take personal responsibility for their actions 
B)  provide limited liability protection to partners 
C)  have a straightforward income tax structure 
D)  are less vulnerable to conflicts between investors 
E)  allow investors to handle issues such as succession and termination better

Question 12

The board of directors are ________.

Accepted Answer

A)  the highest-ranked managers of a corporation 
B)  elected by corporate officers 
C)  representatives of the shareholders 
D)  the top executives running a corporation 
E)  elected by the employees of an organization 
A)  the highest-ranked managers of a corporation 
B)  elected by corporate officers 
C)  representatives of the shareholders 
D)  the top executives running a corporation 
E)  elected by the employees of an organization

Question 13

An electronic appliance marketing company merges with one of its suppliers to form a larger company.This is an example of a ________ merger.

Accepted Answer

A)  market-extension 
B)  product differentiation 
C)  conglomerate 
D)  vertical 
E)  product-extension 
A)  market-extension 
B)  product differentiation 
C)  conglomerate 
D)  vertical 
E)  product-extension

Question 14

An S corporation ________.

Accepted Answer

A)  combines limited liability of a corporation with the federal taxation advantages of a partnership 
B)  does not have such advantages as limited liability of investments 
C)  does not split the ownership into smaller units 
D)  files income tax returns in a country other than the country of operation 
E)  combines limited ownership of a proprietorship with the capital-raising options of a corporation 
A)  combines limited liability of a corporation with the federal taxation advantages of a partnership 
B)  does not have such advantages as limited liability of investments 
C)  does not split the ownership into smaller units 
D)  files income tax returns in a country other than the country of operation 
E)  combines limited ownership of a proprietorship with the capital-raising options of a corporation

Question 15

A corporation is a legal entity distinct from the persons running the corporation.

Accepted Answer

A) True 
 B)False

Question 16

Unlimited liability is a legal condition under which any damages or debts incurred by a business are the owner's personal responsibility.

Accepted Answer

A) True 
 B)False

Question 17

Corporate officers of a company ________.

Accepted Answer

A)  are hired by the board of directors of a company 
B)  have voting rights in directorial meetings 
C)  are hired by the chief executives of a firm 
D)  have voting rights on shareholding issues 
E)  are elected by the shareholders of the company 
A)  are hired by the board of directors of a company 
B)  have voting rights in directorial meetings 
C)  are hired by the chief executives of a firm 
D)  have voting rights on shareholding issues 
E)  are elected by the shareholders of the company

Question 18

Explain the role of corporate officers in corporate governance.

Accepted Answer

Corporate officers play a key role in co

Question 19

RDS Bank has been making losses for many years now.The company's management wants to continue with the same style of operations,whereas many shareholders demand a change in management.A majority of shareholders unites and votes against the management's wish to sell the company to a larger counterpart subject to pressures from an external buyer.This is an example of a(n)________.

Accepted Answer

A)  forced joint venture 
B)  hostile takeover 
C)  strategic alliance 
D)  majority merger 
E)  operational alliance 
A)  forced joint venture 
B)  hostile takeover 
C)  strategic alliance 
D)  majority merger 
E)  operational alliance

Question 20

Which of the following statements is TRUE of strategic alliances?

Accepted Answer

A)  Establishing strategic alliances have more legal requirements than mergers and acquisitions. 
B)  Strategic alliances attract more work than other forms of business. 
C)  Strategic alliances are not an effective way to collaborate. 
D)  Establishing strategic alliances involves more risks than other forms. 
E)  Strategic alliances don't create a unified entity with a single management structure. 
A)  Establishing strategic alliances have more legal requirements than mergers and acquisitions. 
B)  Strategic alliances attract more work than other forms of business. 
C)  Strategic alliances are not an effective way to collaborate. 
D)  Establishing strategic alliances involves more risks than other forms. 
E)  Strategic alliances don't create a unified entity with a single management structure.

Owner has limited personal liability for the business's financial obligations in sole proprietorships.

Which of the following is a key disadvantage of mergers and acquisitions?

In the United States,a corporation is called a domestic corporation if it ________.

Which of the following is a key advantage that corporations have over sole proprietorships and partnerships?

You work for a European company that is planning to launch business in the United States.The firm is planning to incorporate the new business as a partnership with a domestic firm in the U.S.Present the arguments for changing the company's decision and incorporating the business as a corporation.

In a(n)________,two companies join to form a single entity either by pooling their resources or by one company purchasing the assets of the other.

In a(n)________,one company simply buys a controlling interest in the voting stock of another company.

Establishing a corporation is more complicated and expensive compared to establishing a sole proprietorship.

Liquidity is a measure of how easily and quickly an asset can be converted into cash.

Eurotec,a manufacturer of security systems in Italy,merges with a company in China to expand its reach.This is an example of a ________ merger.

A major advantage of partnerships is that they ________.

The board of directors are ________.

An electronic appliance marketing company merges with one of its suppliers to form a larger company.This is an example of a ________ merger.

An S corporation ________.

A corporation is a legal entity distinct from the persons running the corporation.

Unlimited liability is a legal condition under which any damages or debts incurred by a business are the owner's personal responsibility.

Corporate officers of a company ________.

Explain the role of corporate officers in corporate governance.

Which of the following statements is TRUE of strategic alliances?

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

Filters

Exam 5: Forms of Ownership

Owner has limited personal liability for the business's financial obligations in sole proprietorships.

Which of the following is a key disadvantage of mergers and acquisitions?

In the United States,a corporation is called a domestic corporation if it ________.

Which of the following is a key advantage that corporations have over sole proprietorships and partnerships?

You work for a European company that is planning to launch business in the United States.The firm is planning to incorporate the new business as a partnership with a domestic firm in the U.S.Present the arguments for changing the company's decision and incorporating the business as a corporation.

In a(n)________,two companies join to form a single entity either by pooling their resources or by one company purchasing the assets of the other.

In a(n)________,one company simply buys a controlling interest in the voting stock of another company.

Establishing a corporation is more complicated and expensive compared to establishing a sole proprietorship.

Liquidity is a measure of how easily and quickly an asset can be converted into cash.

Eurotec,a manufacturer of security systems in Italy,merges with a company in China to expand its reach.This is an example of a ________ merger.

A major advantage of partnerships is that they ________.

The board of directors are ________.

An electronic appliance marketing company merges with one of its suppliers to form a larger company.This is an example of a ________ merger.

An S corporation ________.

A corporation is a legal entity distinct from the persons running the corporation.

Unlimited liability is a legal condition under which any damages or debts incurred by a business are the owner's personal responsibility.

Corporate officers of a company ________.

Explain the role of corporate officers in corporate governance.

Which of the following statements is TRUE of strategic alliances?

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

Filters