Question 1

Like "C" corporations,S-corporations must pay taxes on any assets that have appreciated in value and are sold.

Accepted Answer

A) True 
 B)False

Question 2

Stockholders in the corporation have the same kind of liability as do general partners in a partnership.

Accepted Answer

A) True 
 B)False

Question 3

A corporation doing business in the state in which it is incorporated is considered to be a(n)________ corporation.

Accepted Answer

A) alien 
B) domestic 
C) foreign 
D) local

Question 4

A partnership is:

Accepted Answer

A) taxed like a corporation. 
B) not subject to the double taxation of some other forms of business. 
C) taxed at the lowest rate for an individual. 
D) taxed under capital gains laws as all profits are considered to come from appreciated assets.

Question 5

The corporation,like the proprietorship,avoids the "double taxation" disadvantage associated with the partnership form of ownership.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Shares the corporation itself owns are called:

Accepted Answer

A) preferred stock. 
B) bonds. 
C) treasury stock. 
D) common stock.

Question 8

Corporations that are formed in other countries but do business in the United States are:

Accepted Answer

A) international partnerships. 
B) domestic corporations. 
C) foreign corporations. 
D) alien corporations.

Question 9

________ corporations have shares that are controlled by a relatively small number of people - family members,relatives,or friends.

Accepted Answer

A) Closely held 
B) Domestic 
C) Foreign 
D) Alien

Question 10

The sole proprietorship has the least ability to accumulate capital.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

In a joint venture,individuals join together in co-ownership for:

Accepted Answer

A) continuous operation. 
B) six to twelve months. 
C) a given limited purpose. 
D) perpetuity.

Question 13

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

Question 14

If a partnership is formed without an agreement,the partnership is automatically subject to the:

Accepted Answer

A) Certification of Incorporation laws. 
B) Uniform Partnership Act. 
C) Limited Liability Company Act. 
D) Revised Uniform Limited Partnership Act.

Question 15

What advantages does a partnership offer the entrepreneur over forming a sole proprietorship?

Accepted Answer

The answer of What advantages does a partnership offer the...

Question 16

The limited liability company is most like a(n):

Accepted Answer

A) general partnership. 
B) master partnership. 
C) sole proprietorship. 
D) S-corporation.

Question 17

Partners can make provisions in the partnership agreement to avoid dissolution due to death only if all parties agree to accept as partners those who inherit the deceased's interest.

Accepted Answer

A) True 
 B)False

Question 18

LLP does pay taxes as a corporation and its income is not passed through to the limited partners.

Accepted Answer

A) True 
 B)False

Question 19

When choosing a form of ownership,the entrepreneur should realize that:

Accepted Answer

A) it is difficult if not impossible to change forms of ownership once the company is established. 
B) the expense of changing forms of ownership makes it prohibitively expensive to change. 
C) the most common form of ownership is the partnership and is the least expensive to establish. 
D) he/she will most likely change the form of ownership as the company grows in size and revenues.

Question 20

The form of ownership can impact an entrepreneur's ability to raise start-up capital.

Accepted Answer

A) True 
 B)False

Exam 3: Choosing a Form of Ownership

Like "C" corporations,S-corporations must pay taxes on any assets that have appreciated in value and are sold.

Stockholders in the corporation have the same kind of liability as do general partners in a partnership.

A corporation doing business in the state in which it is incorporated is considered to be a(n) ________ corporation.

A partnership is:

The corporation,like the proprietorship,avoids the "double taxation" disadvantage associated with the partnership form of ownership.

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.

Shares the corporation itself owns are called:

Corporations that are formed in other countries but do business in the United States are:

________ corporations have shares that are controlled by a relatively small number of people - family members,relatives,or friends.

The sole proprietorship has the least ability to accumulate capital.

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

In a joint venture,individuals join together in co-ownership for:

A distinct disadvantage of the corporate form of ownership is:

If a partnership is formed without an agreement,the partnership is automatically subject to the:

What advantages does a partnership offer the entrepreneur over forming a sole proprietorship?

The limited liability company is most like a(n) :

Partners can make provisions in the partnership agreement to avoid dissolution due to death only if all parties agree to accept as partners those who inherit the deceased's interest.

LLP does pay taxes as a corporation and its income is not passed through to the limited partners.

When choosing a form of ownership,the entrepreneur should realize that:

The form of ownership can impact an entrepreneur's ability to raise start-up capital.