Question 1

Sole proprietorships typically employ fewer than 50 people.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not a source of funds for a sole proprietorship?

Accepted Answer

A) Bank loans 
B) Family members 
C) Personal funds 
D) Selling stock or issuing bonds 
E) Small Business Administration

Question 3

While corporations account for the majority of businesses in the United States,they represent a small minority of profits.

Accepted Answer

A) True 
 B)False

Question 4

Sole proprietorships are taxed as

Accepted Answer

A) A partnership 
B) Individual owner's income is taxed 
C) Shareholders are taxed 
D) Corporations 
E) Depends on the kind of sole proprietorship formed

Question 5

The decision-making process in a partnership tends to be faster when the partnership is

Accepted Answer

A) multifaceted. 
B) small. 
C) foreign. 
D) domestic. 
E) large.

Question 6

The income earned by sole proprietorships is

Accepted Answer

A) taxed twice. 
B) not taxable. 
C) taxed as personal income. 
D) too high. 
E) audited less often than others.

Question 7

A business's legal form of organization has no effect on how much taxes it pays.

Accepted Answer

A) True 
 B)False

Question 8

The type of corporation represented by organizations such as the National Aeronautics and Space Administration (NASA)and the U.S.Postal Service is called

Accepted Answer

A) private. 
B) quasi-private. 
C) public. 
D) quasi-public. 
E) private-public.

Question 9

The government usually will scrutinize high-profile mergers and acquisitions to ensure that they are not creating monopolies.

Accepted Answer

A) True 
 B)False

Question 10

Partnerships have fewer regulatory controls than corporations.

Accepted Answer

A) True 
 B)False

Question 11

The following is an advantage of a sole proprietorship:

Accepted Answer

A) limited sources of funds 
B) profits are not shared 
C) limited liability 
D) ease of hiring qualified employees 
E) owner's role as a generalist

Question 12

Joint ventures are popular in situations that call for

Accepted Answer

A) reduced regulations. 
B) cooperation among farmers or ranchers. 
C) unlimited liability. 
D) large investments. 
E) small investments.

Question 13

All of the following are advantages of a corporation except

Accepted Answer

A) limited liability. 
B) lower frequency of taxation. 
C) perpetual life of organization. 
D) ease of transfer of ownership. 
E) external funding sources.

Question 14

Shark repellant is a method of thwarting a corporate takeover in which management requires a large majority of stockholders to approve the takeover.

Accepted Answer

A) True 
 B)False

Question 15

The organizational form that many consider to be a blend of the best characteristics of corporations,partnerships,and sole proprietorships is the

Accepted Answer

A) joint venture. 
B) cooperative. 
C) C corporation. 
D) S corporation. 
E) limited liability company.

Exam 4: Options for Organizing Business

Sole proprietorships typically employ fewer than 50 people.

Which of the following is not a source of funds for a sole proprietorship?

While corporations account for the majority of businesses in the United States,they represent a small minority of profits.

Sole proprietorships are taxed as

The decision-making process in a partnership tends to be faster when the partnership is

The income earned by sole proprietorships is

A business's legal form of organization has no effect on how much taxes it pays.

The type of corporation represented by organizations such as the National Aeronautics and Space Administration (NASA) and the U.S.Postal Service is called

The government usually will scrutinize high-profile mergers and acquisitions to ensure that they are not creating monopolies.

Partnerships have fewer regulatory controls than corporations.

The following is an advantage of a sole proprietorship:

Joint ventures are popular in situations that call for

All of the following are advantages of a corporation except

Shark repellant is a method of thwarting a corporate takeover in which management requires a large majority of stockholders to approve the takeover.

The organizational form that many consider to be a blend of the best characteristics of corporations,partnerships,and sole proprietorships is the