Deck 13: Business Organizations

Question 1

In a sole proprietorship,the owner is:

A)the business
B)a corporation
C)a subsidiary
D)a partnership
E)none of the other choices

Answer 1

E

Question 2

A disadvantage of the sole proprietorship form is often:

A)business profits are taxed to the owner personally
B)the owner is personally liable for all the business debts
C)the owner has sole responsibility for control,liabilities,and management
D)the record keeping formalities of the business are within the owner's discretion
E)none of the other choices

Answer 2

B

Question 3

A sole proprietorship comes into existence when:

A)a person in business hires at least one employee
B)two or more persons join together to work at a business
C)a charter is received from the secretary of state
D)a person begins to do business for herself
E)when a federal tax identification number is issued for the business

Answer 3

D

Question 4

A person doing business for himself or herself is a(n):

A)registered proprietor
B)manager
C)corporate proprietor
D)partner
E)none of the other choices are correct

Question 5

A disadvantage of the sole proprietorship form is often:

A)business profits are taxed to the owner personally
B)the limited alternatives for raising financial capital
C)the owner has sole responsibility for control,liabilities,and management
D)the record keeping formalities of the business are within the owner's discretion
E)none of the other choices

Question 6

The majority of businesses in the United States are:

A)sole proprietorships
B)non-taxable
C)corporations
D)non-profit
E)partnerships

Question 7

A person doing business for herself is a ____________;the business is a _______________.

A)partner;partnership
B)general partner;limited partnership
C)sole proprietor;proprietorship
D)shareholder;corporation
E)member;syndicate

Question 8

The majority of businesses in the United States are:

A)partnerships
B)non-taxable
C)corporations
D)non-profit
E)none of the other choices are correct

Question 9

In a sole proprietorship,the capital usually:

A)must come from the owner's own resources or be borrowed
B)comes from the government
C)comes from investors
D)comes from the stock market
E)comes from taxes

Question 10

In a sole proprietorship,the owner is:

A)the business
B)a corporation
C)a subsidiary
D)a partnership
E)an amalgamation

Question 11

The oldest and simplest form of business organization is the:

A)joint venture
B)limited partnership
C)syndicate
D)cooperative
E)proprietorship

Question 12

The oldest and simplest form of business organization is:

A)joint venture
B)partnership
C)syndicate
D)cooperative
E)none of the other choices

Question 13

A sole proprietorship comes into existence when:

A)a person in business hires at least one employee
B)two or more persons join together to work at a business
C)a charter is received from the secretary of state
D)when a federal tax identification number is issued for the business
E)none of the other choices

Question 14

In a sole proprietorship,profits are taxed to the:

A)corporate owner of the proprietorship
B)individual owner of the proprietorship
C)general partners
D)state
E)none of the other choices

Question 15

There are ______________ businesses in the United States.

A)over 30 million
B)under 20 million
C)over 50 million
D)less than 500,000
E)too many

Question 16

A person doing business for herself is a ____________;the business is a _______________.

A)partner;partnership
B)general partner;limited partnership
C)member;syndicate
D)shareholder;corporation
E)none of the other choices

Question 17

A(n)______________is any name other than the name of the individual who owns the business.

A)fake name
B)illegitimate name
C)false name
D)fictitious name
E)confusing name

Question 18

In a sole proprietorship,the capital usually:

A)comes from taxes
B)comes from the government
C)comes from investors
D)comes from the stock market
E)none of the other choices are correct

Question 19

The most common form of business organization is:

A)joint venture
B)partnership
C)proprietorship
D)corporation
E)none of the other choices

Question 20

A person doing business for himself or herself is a(n):

A)single proprietor
B)sole proprietor
C)only proprietor
D)partner
E)general proprietor

Question 21

A written partnership agreement typically specifies the following except:

A)the ownership interests of the partners
B)that the partnership will be established under federal or state law
C)the name of the partnership business
D)the procedures for dissolution of the partnership
E)the method of accounting to be used

Question 22

A ____________ is an association of two or more persons to carry on a business as co-owners for profit.

A)proprietorship
B)corporation
C)partnership
D)cooperative
E)all of the other choices

Question 23

Which of the following is not true about a partnership?

A)it must be owned by two or more people
B)it is always an independent legal entity
C)partners co-own the business
D)partners share control over the business operation
E)all of the other choices are true

Question 24

Which of the following are usually included in a written partnership agreement:

A)name of the partnership
B)the allocation of ownership shares
C)accounting rules
D)voting rights of the partners
E)all of the other specific choices are usually included

Question 25

In most circumstances,a partnership is now treated as:

A)a legal entity
B)a special entity with no ability to sue or be sued
C)a proxy
D)a sole proprietorship
E)none of the other choices are correct

Question 26

Under traditional common law rules,if you wanted to sue a partnership you had to:

A)wait until the partnership was incorporated to sue
B)sue the partnership as a group
C)sue the state on behalf of the partnership
D)have the state sue the partnership
E)none of the other choices

Question 27

A general partnership is:

A)an association of two or more persons to carry on a business as co-owners for a profit
B)an association of two or more companies that help each other with business,but do not share profits
C)an understanding between a supplier and a distributor
D)a merger of two corporations
E)none of the other choices are correct

Question 28

A ____________ is an association of two or more persons to carry on a business as co-owners for profit.

A)proprietorship
B)corporation
C)sole proprietorship
D)cooperative
E)none of the other choices are correct

Question 29

A partnership can begin with either a(n)_____________ or a(n)______________.

A)oral agreement;implied agreement
B)oral agreement;false agreement
C)oral agreement;forced agreement
D)implied agreement;default agreement
E)implied agreement;loan agreement

Question 30

Which of the following is a disadvantage of a sole proprietorship:

A)business profits are taxed to the owner personally
B)the owner is personally liable for all the business debts
C)the limited alternatives for raising financial capital
D)both b and c are disadvantages of a sole proprietorship
E)both a and c are disadvantages of a sole proprietorship

Question 31

The _____________ provides "default rules" that determine the operation of partnerships when the partnership agreement is silent or where there is no formal agreement among the partners.

A)Revised Uniform Proprietorship Act
B)Revised Universal Partnership Act
C)Revised Real Partnership Act
D)Revised Unified Partnership Act
E)none of the other choices are correct

Question 32

Under traditional common law rules,a partnership:

A)was always treated as a single legal entity
B)could only be formed with the consent of the state
C)had the same legal personality as a corporation
D)was forbidden under the law
E)none of the other choices

Question 33

A written partnership agreement typically specifies the following except:

A)the ownership interests of the partners
B)the method of accounting to be used
C)the name of the partnership business
D)the procedures for dissolution of the partnership
E)all of the other choices are usually included in the agreement

Question 34

Under traditional common law rules,if you wanted to sue a partnership you had to:

A)sue each partner individually
B)sue the partnership as a group
C)sue the state on behalf of the partnership
D)have the state sue the partnership
E)wait until the partnership was incorporated to sue

Question 35

Which of the following are usually included in a written partnership agreement:

A)place and date of formation
B)the distribution of profits
C)priority rights in payments
D)how partnership shares will be valued
E)all of the other specific choices are usually included

Question 36

A partnership can begin with:

A)an implied agreement that can be inferred from the conduct of the parties doing business
B)a written agreement
C)an oral agreement
D)a written agreement or an oral agreement only
E)a written agreement or an oral agreement or an implied agreement that can be inferred from the conduct of the parties doing business

Question 37

Under traditional common law rules,a partnership:

A)was always treated as a single legal entity
B)generally was not treated as a single legal entity
C)had the same legal personality as a corporation
D)was forbidden under the law
E)could only be formed with the consent of the state

Question 38

The owner of a sole proprietorship:

A)is legally the same as the business
B)is taxed the same as the business
C)may hire any number of employees
D)is legally the same as the business and is taxed the same as the business
E)is legally the same as the business and is taxed the same as the business and may hire any number of employees

Question 39

The _____________ provides "default rules" that determine the operation of partnerships when the partnership agreement is silent or where there is no formal agreement among the partners.

A)Revised Uniform Proprietorship Act
B)Revised Uniform Partnership Act
C)Revised Real Partnership Act
D)Revised Unified Partnership Act
E)Revised Universal Partnership Act

Question 40

Which of the following apply to a sole proprietorship:

A)a person is in business for himself
B)no government license usually required
C)no tax return required in the name of the business
D)a person is in business for himself and no government license usually required
E)none of the other choices

Question 41

Partners in a partnership owe each other:

A)direct interest responsibility
B)a duty to contribute direct assets
C)a fiduciary duty
D)a duty of ordinary care
E)none of the other choices

Question 42

In Brown v.Swett and Crawford of Texas,where Brown and Galtney were hired to run an insurance office for Swett,but Brown was later fired and sued for wrongful expulsion from a partnership,the appeals court held that Brown:

A)was a partner so was owed the fair market value of his share in the organization
B)was a partner but breached his duty to other partners by not working,so could be fired from the partnership
C)was not a partner,he was an employee subject to wrongful dismissal and could sue for damages for that
D)was a sole proprietor because he worked independently by contract,so had no right to sue for partnership rights
E)none of the other choices

Question 43

In Brown v.Swett and Crawford of Texas,where Brown and Galtney were hired to run an insurance office for Swett,but Brown was later fired and sued for wrongful expulsion from a partnership,the appeals court held that:

A)Brown's partnership claims failed as a matter of law because he had no right to receive a share of the profits of the business
B)Brown's partnership claims were valid because he had a right to receive a share of the profits of the business
C)Brown's partnership claims were valid because he shared in the losses of the business
D)Brown's partnership claims were not valid because he had failed to fill out the proper paperwork when the partnership was established
E)Brown's partnership claims were valid,but his dishonest conduct invalidated them

Question 44

A(n)_____________requires that each partner act in good faith for the benefit of the partnership.

A)partnership relationship
B)contractual relationship
C)fiduciary relationship
D)contractual promise
E)none of the other choices are correct

Question 45

The duty of partners to a partnership is:

A)to elect one partner as managing partner
B)to place the assets in a blind trust
C)based on extraordinary trust and loyalty to the partnership
D)to elect one partner as managing partner and is based on extraordinary trust and loyalty to the partnership
E)to elect one partner as managing partner and to place the assets in a blind trust and is based on extraordinary trust and loyalty to the partnership

Question 46

In Brown v.Swett and Crawford of Texas,where Brown and Galtney were hired to run an insurance office for Swett,but Brown was later fired and sued for wrongful expulsion from a partnership,the appeals court held that Brown:

A)was a partner so was owed the fair market value of his share in the organization
B)was a partner but breached his duty to other partners by not working,so could be fired from the partnership
C)was not a partner,he was an employee subject to wrongful dismissal and could sue for damages for that
D)was not a partner,he was an employee paid on commission who could be fired any time
E)none of the other choices

Question 47

In Japan small businesses are:

A)greatly favored by the government
B)exempt from most taxes
C)considered very desirable places to work
D)formed at a much faster rate than in the United States
E)none of the other choices are correct

Question 48

Which of the following are usually included in a written partnership agreement:

A)state law that applies to the partnership
B)contributions of the partners
C)limits on transfers of partnership shares
D)how partnership shares will be valued
E)all of the other specific choices are usually included

Question 49

Unless otherwise stated by contract,the law of partnership presumes which of the following not to be true?

A)each partner has an equal voice in partnership management
B)a majority vote controls ordinary business decisions
C)profits are to be divided among the partners
D)regardless of the amount invested in the partnership,each partner has an equal vote
E)all of the other choices are true

Question 50

A change in the relationship of the partners that shows an unwillingness or an inability to continue with business may bring about _____________ of the partnership.

A)finalization
B)retaliation
C)composition
D)revitalization
E)none of the other choices are correct

Question 51

In Japan small businesses are:

A)greatly favored by the government
B)exempt from most taxes
C)considered very desirable places to work
D)considered less desirable places to work
E)formed at a much faster rate than in the United States

Question 52

In Brown v.Swett and Crawford of Texas,where Brown and Galtney were hired to run an insurance office for Swett,but Brown was later fired and sued for wrongful expulsion from a partnership,the appeals court held that:

A)Brown's partnership claims were valid,but his dishonest conduct invalidated them
B)Brown's partnership claims were valid because he had a right to receive a share of the profits of the business
C)Brown's partnership claims were valid because he shared in the losses of the business
D)Brown's partnership claims were not valid because he had failed to fill out the proper paperwork when the partnership was established
E)none of the other choices are correct

Question 53

In Japan small businesses are:

A)greatly favored by the government
B)exempt from most taxes
C)considered very desirable places to work
D)discriminated against by government policy
E)formed at a much faster rate than in the United States

Question 54

Unless otherwise stated by contract,the law of partnership presumes which of the following not to be true?

A)each partner has an equal voice in partnership management
B)a majority vote controls ordinary business decisions
C)only managing partners are fully responsible for debts of the partnership
D)regardless of the amount invested in the partnership,each partner has an equal vote
E)all of the other choices are true

Question 55

Gary and Sue start a consulting firm.They are co-owners of it and have joint control over its operation and the right to share in its profits.Their organization is most likely a:

A)proprietorship
B)partnership
C)business trust
D)corporation
E)syndicate

Question 56

Which of the following is a decision that would most likely require the consent of all partners:

A)changing the nature of the partnership's business
B)admitting new partners
C)selling the business
D)all of the other specific choices are correct
E)none of the other specific choices are correct

Question 57

A change in the relationship of the partners that shows an unwillingness or an inability to continue with business may bring about _____________ of the partnership.

A)finalization
B)termination
C)composition
D)revitalization
E)retaliation

Question 58

A complete termination comes about only after the partnership has been ________ and its affairs have been wound up.

A)finalized
B)disillusioned
C)standardized
D)reorganized
E)none of the other choices are correct

Question 59

Compared to the U.S. ,new businesses in Japan:

A)are created more frequently than they are in the U.S.
B)are created much less frequently than they are in the U.S.
C)are greatly encouraged by banking regulations
D)are greatly encouraged by Japanese tax rates
E)may operate with less money than U.S.businesses

Question 60

A complete termination comes about only after the partnership has been ________ and its affairs have been wound up.

A)dissolved
B)disillusioned
C)standardized
D)reorganized
E)finalized

Question 61

A business organization in which some of the partners are not liable for partnership debts is called a(n):

A)no liability partnership
B)limited liability partnership
C)partial liability partnership
D)local liability partnership
E)unlimited liability partnership

Question 62

Which of the following could lead to the dissolution of a partnership:

A)withdrawal of a partner
B)death of a partner
C)bankruptcy of a partner
D)all of the other specific choices are correct
E)none of the other specific choices are correct

Question 63

In general,if a partnership agreement does not specify what happens in case of the death or departure of a partner,one looks to:

A)Federal Partnership Act
B)Robinson-Patman Act
C)Partnership Operation Act
D)Partnership Termination Act
E)none of the other choices

Question 64

The dissolution of a partnership may occur:

A)if a partner is found to be bankrupt
B)if the business of the partnership is made unlawful
C)if a partner dies
D)if a partner is found to be bankrupt or if a partner dies
E)if a partner is found to be bankrupt or if a partner dies or if the business of the partnership is made unlawful

Question 65

The dissolution of a partnership occurs:

A)when an event takes place that precludes the partners from continuing in business
B)during the process of completing any unfinished business of the partnership
C)during the collection and distribution of the partnership's assets
D)when a certificate of limited partnership is executed
E)none of the other choices

Question 66

In general,if a partnership agreement does not specify what happens in case of the death or departure of a partner,one looks to:

A)Federal Partnership Act
B)Robinson-Patman Act
C)Uniform Partnership Act
D)Partnership Termination Act
E)Partnership Operation Act

Question 67

A business organization in which some of the partners are not liable for partnership debts is called a(n):

A)no liability partnership
B)unlimited liability partnership
C)partial liability partnership
D)local liability partnership
E)none of the other choices are correct

Question 68

Which of the following are not required to be in a certificate of limited partnership:

A)the type or character of the business
B)the business positions to be held by each partner
C)the proportion of profits to be earned by each partner
D)the business positions to be held by each partner and the proportion of profits to be earned by each partner
E)the business positions to be held by each partner and the proportion of profits to be earned by each partner and the proportion of profits to be earned by each partner

Question 69

In most states a limited partnership does not have to file what information with the appropriate state official?

A)name of the business
B)names and addresses of all partners
C)bankruptcy history of each partner
D)the share of profits to be paid to each partner
E)all of the other choices must be filed

Question 70

Dissolution of a partnership takes place,unless otherwise provided for by contract,in the following instances except:

A)bankruptcy of a partner
B)withdrawal of a partner
C)change in financial condition of a partner
D)death of a partner
E)all of the other choices would require dissolution

Question 71

In most states a limited partnership does not have to file what information with the appropriate state official?

A)name of the business
B)names and addresses of all partners
C)contributions each partner has made
D)the share of profits to be paid to each partner
E)all of the other choices must be filed

Question 72

Dissolution of a partnership takes place,unless otherwise provided for by contract,in the following instances except:

A)bankruptcy of a partner
B)withdrawal of a partner
C)death of a partner
D)withdrawal or death of a partner only
E)bankruptcy,withdrawal or death of a partner

Question 73

The business organization that has at least one general partner and other investors who have limited liability is a:

A)corporation
B)general partnership
C)limited partnership
D)limited liability company
E)proprietorship

Question 74

A business organization made up of two or more persons who have entered into an agreement to carry on a business venture for a profit,and not all persons have the right to participate in management decisions is a:

A)proprietorship
B)limited partnership
C)cooperative
D)general partnership
E)none of the other choices

Question 75

During the course of a partnership's winding-up process,the partners owe each other:

A)a duty to mitigate
B)a duty to compete fully
C)a duty to refrain from termination
D)a duty of discounting
E)none of the other choices

Question 76

Which of the following must be contained in a certificate of limited partnership under the Uniform Limited Partnership Act:

A)name of the business
B)type or character of the business
C)the address of an agent who is designated to receive legal process
D)duration of the limited partnership
E)all of the other choices are correct

Question 77

During the course of a partnership's winding-up process,the partners owe each other:

A)a duty to disclose all finances of the partnership
B)a duty to compete fully
C)a duty to refrain from termination
D)a duty of discounting
E)a duty to mitigate

Question 78

A limited partnership is different from a general partnership because:

A)a limited partnership can have only two people in active management
B)there are limits to annual capital gains in limited partnership
C)all partners in a limited partnership must actively participate in major managerial decisions
D)a limited partnership may have only one general partner
E)none of the other choices

Question 79

Under the Uniform Limited Partnership Act,a written partnership agreement must include:

A)the name of the business
B)the type or character of the business
C)the contributions of each partner
D)the name of the business and the type or character of the business
E)the name of the business and the type or character of the business and the contributions of each partner

Question 80

The ___________ of partnership affairs involves completing any unfinished business and then collecting and distributing the partnership's assets.

A)winding down
B)resetting
C)winding up
D)terminating
E)dissolution