Question 1

Profits earned are taxed as personal income and there are no special taxes to pay in the sole proprietorship form of business ownership.

Accepted Answer

A) True 
 B)False

Question 2

A hostile takeover is a takeover that is resisted by the targeted company's management and its board of directors.

Accepted Answer

A) True 
 B)False

Question 3

Studies show that partnerships are more successful than sole proprietorships.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not a requirement of an S-corporation

Accepted Answer

A)  maximum of 100 stockholders 
B)  each stockholder must be a U.S. citizen or resident 
C)  revenues must be less than $1 million annually 
D)  all stockholders must concur with the decision to form the S-corporation 
A)  maximum of 100 stockholders 
B)  each stockholder must be a U.S. citizen or resident 
C)  revenues must be less than $1 million annually 
D)  all stockholders must concur with the decision to form the S-corporation

Question 5

Continuity is an advantage of a corporation; however, ease in transferability is a disadvantage.

Accepted Answer

A) True 
 B)False

Question 6

Under the ____ form of ownership, it's important to have an agreement about conditions for settling disputes.

Accepted Answer

A)  general partnership 
B)  limited partnership 
C)  corporation 
D)  sole proprietor 
A)  general partnership 
B)  limited partnership 
C)  corporation 
D)  sole proprietor

Question 7

The major problem with general partnerships is:

Accepted Answer

A)  shared decision making 
B)  unlimited liability 
C)  continuity 
D)  disputes among partners 
A)  shared decision making 
B)  unlimited liability 
C)  continuity 
D)  disputes among partners

Question 8

The shareholders elect a board of directors, primarily from within the corporation, who manage the company.

Accepted Answer

A) True 
 B)False

Question 9

SCENARIO-BASED
Scuffy the Tugboat is a family-run business that makes tugboats.  It is owned by three brothers, Jack, Frank, and Bob.  Their first tugboat is still towing ships in Boston Harbor, and over the years, success has allowed them to grow the company by plowing money back into it.  Now, however, they want to expand but they are not sure how they should do this.   They are also unsure about which legal form of organization is best for them. 
-They could expand their operations by acquiring another tugboat company. This type of deal is called a merger.

Accepted Answer

A) True 
 B)False

Question 10

Maria Martin owns an advertising company. She gets to keep all of the income earned by the business. She operates it as a(n) _____.

Accepted Answer

A)  partnership 
B)  sole proprietorship 
C)  S Corporation 
D)  corporation 
A)  partnership 
B)  sole proprietorship 
C)  S Corporation 
D)  corporation

Question 11

A major disadvantage of a partnership is that partners may disagree on how to operate the business and divide the profits.

Accepted Answer

A) True 
 B)False

Question 12

A business that is owned and controlled by those who use its services is called a cooperative.

Accepted Answer

A) True 
 B)False

Question 13

If a sole proprietorship incurs a debt or suffers a catastrophe, the owner is personally liable for it.

Accepted Answer

A) True 
 B)False

Question 14

Realizing more efficient economies of scale is not practical through mergers or acquisitions.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a disadvantage of the corporate form of organization

Accepted Answer

A)  limited liability 
B)  continuity 
C)  greater access of financial resources 
D)  owners and managers are not always the same people 
A)  limited liability 
B)  continuity 
C)  greater access of financial resources 
D)  owners and managers are not always the same people

Question 16

A(n) _____ occurs when two companies join together and form a new company.

Accepted Answer

A)  acquisition 
B)  merger 
C)  hostile takeover 
D)  joint venture 
A)  acquisition 
B)  merger 
C)  hostile takeover 
D)  joint venture

Question 17

Sole proprietorships account for about 72% of all U.S. businesses.

Accepted Answer

A) True 
 B)False

Question 18

The rationale behind growth through merger or acquisition is that one plus one equals three: the combined company is more valuable than the sum of the two separate companies.

Accepted Answer

A) True 
 B)False

Question 19

Choosing the right form of business ownership will give the owner everything he or she desires.

Accepted Answer

A) True 
 B)False

Question 20

A limited partnership is restricted to joint ownership by two people.

Accepted Answer

A) True 
 B)False

Profits earned are taxed as personal income and there are no special taxes to pay in the sole proprietorship form of business ownership.

A hostile takeover is a takeover that is resisted by the targeted company's management and its board of directors.

Studies show that partnerships are more successful than sole proprietorships.

Which of the following is not a requirement of an S-corporation

Continuity is an advantage of a corporation; however, ease in transferability is a disadvantage.

Under the ____ form of ownership, it's important to have an agreement about conditions for settling disputes.

The major problem with general partnerships is:

The shareholders elect a board of directors, primarily from within the corporation, who manage the company.

Maria Martin owns an advertising company. She gets to keep all of the income earned by the business. She operates it as a(n) _____.

A major disadvantage of a partnership is that partners may disagree on how to operate the business and divide the profits.

A business that is owned and controlled by those who use its services is called a cooperative.

If a sole proprietorship incurs a debt or suffers a catastrophe, the owner is personally liable for it.

Realizing more efficient economies of scale is not practical through mergers or acquisitions.

Which of the following is a disadvantage of the corporate form of organization

A(n) _____ occurs when two companies join together and form a new company.

Sole proprietorships account for about 72% of all U.S. businesses.

The rationale behind growth through merger or acquisition is that one plus one equals three: the combined company is more valuable than the sum of the two separate companies.

Choosing the right form of business ownership will give the owner everything he or she desires.

A limited partnership is restricted to joint ownership by two people.

The Foundations of Business

Business Ethics and Social Responsibility

Business in a Global Environment

The Challenges of Starting a Business

Managing for Business Success

Recruiting, Motivating, and Keeping Quality Employees

Teamwork and Communications

Marketing: Providing Value to Customers

Product Design and Development

Operations Management in Manufacturing and Service Industries

The Role of Accounting in Business

Managing Financial Resources

Personal Finances

Managing Information and Technology

The Legal and Regulatory Environment of Business

Filters

Exam 4: Selecting a Form of Business Ownership

Profits earned are taxed as personal income and there are no special taxes to pay in the sole proprietorship form of business ownership.

A hostile takeover is a takeover that is resisted by the targeted company's management and its board of directors.

Studies show that partnerships are more successful than sole proprietorships.

Which of the following is not a requirement of an S-corporation

Continuity is an advantage of a corporation; however, ease in transferability is a disadvantage.

Under the ____ form of ownership, it's important to have an agreement about conditions for settling disputes.

The major problem with general partnerships is:

The shareholders elect a board of directors, primarily from within the corporation, who manage the company.

Maria Martin owns an advertising company. She gets to keep all of the income earned by the business. She operates it as a(n) _____.

A major disadvantage of a partnership is that partners may disagree on how to operate the business and divide the profits.

A business that is owned and controlled by those who use its services is called a cooperative.

If a sole proprietorship incurs a debt or suffers a catastrophe, the owner is personally liable for it.

Realizing more efficient economies of scale is not practical through mergers or acquisitions.

Which of the following is a disadvantage of the corporate form of organization

A(n) _____ occurs when two companies join together and form a new company.

Sole proprietorships account for about 72% of all U.S. businesses.

The rationale behind growth through merger or acquisition is that one plus one equals three: the combined company is more valuable than the sum of the two separate companies.

Choosing the right form of business ownership will give the owner everything he or she desires.

A limited partnership is restricted to joint ownership by two people.

The Foundations of Business

Business Ethics and Social Responsibility

Business in a Global Environment

The Challenges of Starting a Business

Managing for Business Success

Recruiting, Motivating, and Keeping Quality Employees

Teamwork and Communications

Marketing: Providing Value to Customers

Product Design and Development

Operations Management in Manufacturing and Service Industries

The Role of Accounting in Business

Managing Financial Resources

Personal Finances

Managing Information and Technology

The Legal and Regulatory Environment of Business

Filters