Question 1

Partnerships have a number of advantages over other forms of ownership,such as:

Accepted Answer

A) a larger pool of capital and little government regulation. 
B) very easy liquidation of owners' investment. 
C) limited liability for all partners. 
D) they may be easily formed by an individual. 
A) a larger pool of capital and little government regulation. 
B) very easy liquidation of owners' investment. 
C) limited liability for all partners. 
D) they may be easily formed by an individual.

Question 2

The most popular form of ownership in the United States is the partnership.

Accepted Answer

A) True 
 B)False

Question 3

In a sole proprietorship,the owner has limited liability.

Accepted Answer

A) True 
 B)False

Question 4

The partnership,like the proprietorship,avoids the disadvantage of double taxation.

Accepted Answer

A) True 
 B)False

Question 5

The sole proprietorship has the least ability to accumulate capital.

Accepted Answer

A) True 
 B)False

Question 6

If a sole proprietorship fails,the owner is not liable for its debts since the business is a separate legal entity.

Accepted Answer

A) True 
 B)False

Question 7

If stockholders in a corporation are displeased with the business's progress,they can sell their shares to someone else.

Accepted Answer

A) True 
 B)False

Question 8

To avoid becoming liable for corporate actions,officers should ensure that they hold annual meetings,keep minutes of those meetings,make sure the board of directors makes all decisions,etc.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a disadvantage of the corporation form of ownership?

Accepted Answer

A) An inability to accumulate capital 
B) The unlimited liability to the members of the board 
C) Double taxation on profits and individuals 
D) The lack of continuity 
A) An inability to accumulate capital 
B) The unlimited liability to the members of the board 
C) Double taxation on profits and individuals 
D) The lack of continuity

Question 10

The Uniform Partnership Act outlines a number of general obligations that partners have such as the obligation to:

Accepted Answer

A) give other partners complete information about all business affairs. 
B) share in the management and operation of the business. 
C) be compensated for personal expenses incurred. 
D) have access to the business's books and records. 
A) give other partners complete information about all business affairs. 
B) share in the management and operation of the business. 
C) be compensated for personal expenses incurred. 
D) have access to the business's books and records.

Question 11

Traditionally,________ were always set up as nonprofit corporations.

Accepted Answer

A) businesses 
B) corporations 
C) social enterprises 
D) partnerships 
A) businesses 
B) corporations 
C) social enterprises 
D) partnerships

Question 12

The most critical disadvantage of the sole proprietorship is:

Accepted Answer

A) unlimited personal liability. 
B) limited access to capital. 
C) lack of continuity. 
D) limited skills and capacities of the owner. 
A) unlimited personal liability. 
B) limited access to capital. 
C) lack of continuity. 
D) limited skills and capacities of the owner.

Question 13

While a sole proprietorship gives the owner maximum flexibility in running the business,it also:

Accepted Answer

A) makes the company a prime target for an acquisition or merger. 
B) creates a sense of isolation. 
C) makes it difficult to hire management talent to help grow the business. 
D) makes it difficult to sell. 
A) makes the company a prime target for an acquisition or merger. 
B) creates a sense of isolation. 
C) makes it difficult to hire management talent to help grow the business. 
D) makes it difficult to sell.

Question 14

Carlos founded the "Taco Factory" 20 years ago as a family-oriented restaurant business.Over the years as he grew the business,he incorporated and sold stock.Recently the stockholders voted to seek liquor licenses and sell beer and hard liquor in the restaurants.Carlos opposed this,citing the history of the restaurant's "family" environment,but was voted down.Carlos experienced which drawback of the corporate form of ownership?

Accepted Answer

A) The inability to accumulate capital 
B) The potential for diminished managerial incentives 
C) Legal requirements and red tape 
D) The potential loss of control 
A) The inability to accumulate capital 
B) The potential for diminished managerial incentives 
C) Legal requirements and red tape 
D) The potential loss of control

Question 15

________ partners are not active in a business but generally are known to be members of the partnership.

Accepted Answer

A) Dormant 
B) General 
C) Silent 
D) Limited 
A) Dormant 
B) General 
C) Silent 
D) Limited

Question 16

Ownership of a corporation can easily be transferred through the sale of stock.

Accepted Answer

A) True 
 B)False

Question 17

The ________ is the most complex form of ownership and is a separate legal entity in the eyes of the law.

Accepted Answer

A) sole proprietorship 
B) partnership 
C) corporation 
D) joint venture 
A) sole proprietorship 
B) partnership 
C) corporation 
D) joint venture

Question 18

A distinct disadvantage of the corporate form of ownership is:

Accepted Answer

A) treasury stock. 
B) double taxation. 
C) stockholder's liability. 
D) All of the above 
A) treasury stock. 
B) double taxation. 
C) stockholder's liability. 
D) All of the above

Question 19

Sole proprietorships characteristically are:

Accepted Answer

A) fairly complex to create. 
B) subject to special legal restrictions. 
C) expensive to create. 
D) easy to discontinue. 
A) fairly complex to create. 
B) subject to special legal restrictions. 
C) expensive to create. 
D) easy to discontinue.

Question 20

The primary reason entrepreneurs choose to incorporate is because of:

Accepted Answer

A) the corporation's ability to attract capital. 
B) the need to attract top quality management talent to grow the business. 
C) the lower tax rates inherent in the corporate form of ownership. 
D) the limited liability of stockholders. 
A) the corporation's ability to attract capital. 
B) the need to attract top quality management talent to grow the business. 
C) the lower tax rates inherent in the corporate form of ownership. 
D) the limited liability of stockholders.

Exam 5: Choosing a Form of Ownership

Partnerships have a number of advantages over other forms of ownership,such as:

The most popular form of ownership in the United States is the partnership.

In a sole proprietorship,the owner has limited liability.

The partnership,like the proprietorship,avoids the disadvantage of double taxation.

The sole proprietorship has the least ability to accumulate capital.

If a sole proprietorship fails,the owner is not liable for its debts since the business is a separate legal entity.

If stockholders in a corporation are displeased with the business's progress,they can sell their shares to someone else.

To avoid becoming liable for corporate actions,officers should ensure that they hold annual meetings,keep minutes of those meetings,make sure the board of directors makes all decisions,etc.

Which of the following is a disadvantage of the corporation form of ownership?

The Uniform Partnership Act outlines a number of general obligations that partners have such as the obligation to:

Traditionally,________ were always set up as nonprofit corporations.

The most critical disadvantage of the sole proprietorship is:

While a sole proprietorship gives the owner maximum flexibility in running the business,it also:

________ partners are not active in a business but generally are known to be members of the partnership.

Ownership of a corporation can easily be transferred through the sale of stock.

The ________ is the most complex form of ownership and is a separate legal entity in the eyes of the law.

A distinct disadvantage of the corporate form of ownership is:

Sole proprietorships characteristically are:

The primary reason entrepreneurs choose to incorporate is because of:

Entrepreneurs: the Driving Force Behind Small Business

Ethics and Social Responsibility: Doing the Right Thing

Creativity and Innovation: Keys to Entrepreneurial Success

Strategic Management and the Entrepreneur

Franchising and the Entrepreneur

Buying an Existing Business

New Business Planning Process: Feasibility Analysis,business Modeling,

Building a Bootstrap Marketing Plan

Creative Use of Advertising and Promotion

Pricing and Credit Strategies

Global Marketing Strategies

E-Commerce and Entrepreneurship

Creating a Solid Financial Plan

Managing Cash Flow

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Supply Chain Management

Managing Inventory

Staffing and Leading a Growing Company

Management Succession and Risk Management Strategies in the Family Business

The Legal Environment: Business Law and Government Regulation

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