Question 1

Loans made by partners to a partnership are partnership capital.

Accepted Answer

A) True 
 B)False

Question 2

The _____ is the preferred form of business for professionals and is especially good for consultants and auditors,allowing them management flexibility while insulating them mostly from personal liability.

Accepted Answer

A)  S Corporation 
B)  LLLP 
C)  LLC 
D)  LLP 
A)  S Corporation 
B)  LLLP 
C)  LLC 
D)  LLP

Question 3

A _____ is owned by shareholders who elect a board of directors to manage the business.

Accepted Answer

A)  limited liability company 
B)  corporation 
C)  partnership 
D)  sole proprietorship 
A)  limited liability company 
B)  corporation 
C)  partnership 
D)  sole proprietorship

Question 4

The charging order creditor is a lien creditor and is entitled to receive only the partner's share of the partnership distributions.

Accepted Answer

A) True 
 B)False

Question 5

Individuals in a valid general partnership are not personally liable for the actions of the business.

Accepted Answer

A) True 
 B)False

Question 6

A _____ is found when an arrangement is made not to establish an ongoing business involving many transactions,but is limited to a single project.

Accepted Answer

A)  corporation 
B)  limited liability company 
C)  partnership 
D)  joint venture 
A)  corporation 
B)  limited liability company 
C)  partnership 
D)  joint venture

Question 7

The shareholders of a corporation that has elected S Corporation status may report the income and losses of the business on their individual federal income tax returns.

Accepted Answer

A) True 
 B)False

Question 8

Partners of a partnership:

Accepted Answer

A)  are not liable for all the obligations of their partnership. 
B)  are entitled to income of the partnership,which must be reported on their individual federal income tax returns. 
C)  are not permitted to deduct partnership losses on their individual federal income tax returns. 
D)  can create a partnership only by complying with a statute. 
A)  are not liable for all the obligations of their partnership. 
B)  are entitled to income of the partnership,which must be reported on their individual federal income tax returns. 
C)  are not permitted to deduct partnership losses on their individual federal income tax returns. 
D)  can create a partnership only by complying with a statute.

Question 9

You can form a partnership with one individual.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is NOT a consequence of being a partner of a partnership?

Accepted Answer

A)  Partners are not liable for each other's torts. 
B)  Partners are agents of each other. 
C)  Each partner owns a portion of the value of the business. 
D)  Each partner owes fiduciary duties to the partnership and to the other partners. 
A)  Partners are not liable for each other's torts. 
B)  Partners are agents of each other. 
C)  Each partner owns a portion of the value of the business. 
D)  Each partner owes fiduciary duties to the partnership and to the other partners.

Exam 37: Introduction to Forms of Business and Formation of Partnerships

Loans made by partners to a partnership are partnership capital.

The _____ is the preferred form of business for professionals and is especially good for consultants and auditors,allowing them management flexibility while insulating them mostly from personal liability.

A _____ is owned by shareholders who elect a board of directors to manage the business.

The charging order creditor is a lien creditor and is entitled to receive only the partner's share of the partnership distributions.

Individuals in a valid general partnership are not personally liable for the actions of the business.

A _____ is found when an arrangement is made not to establish an ongoing business involving many transactions,but is limited to a single project.

The shareholders of a corporation that has elected S Corporation status may report the income and losses of the business on their individual federal income tax returns.

Partners of a partnership:

You can form a partnership with one individual.

Which of the following is NOT a consequence of being a partner of a partnership?

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinson-Patman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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