Question 1

Which of the following is not a disadvantage of the corporate form of ownership?

Accepted Answer

A)   Difficulty of formation
B)   Limited liability
C)   Expense of incorporation and selling stock
D)   Lack of secrecy
E)   Double taxationF) C) and D)
G) C) and E)

Question 2

Lisa and John own a partnership that provides rental equipment for parties and special occasions. Which of the following is true about the way Lisa and John would handle company profits?

Accepted Answer

A)   Automatically split the profits, with 50 percent for Lisa and 50 percent for John.
B)   They would do nothing because partnerships require that profits remain in the business.
C)   Divide the profits according to each person's investment in the business.
D)   Distribute the profits according to the terms of the partnership agreement.
E)   Split the profits according to how many hours each person worked.F) B) and C)
G) A) and E)

Question 3

Corporate officers are

Accepted Answer

A)   listed in the corporate charter.
B)   elected by stockholders.
C)   appointed by the board of directors.
D)   appointed by management.
E)   elected by incorporators.F) A) and B)
G) C) and D)

Question 4

Which of the following is a requirement for an S-corporation?

Accepted Answer

A)   The S-corporation must be incorporated in Delaware.
B)   The S-corporation can have no more than 100 stockholders.
C)   Only common and preferred stock can be sold to investors.
D)   At least 30 percent of the investors must be nonresident aliens.
E)   Only individuals can be stockholders.F) C) and E)
G) A) and D)

Question 5

A cooperative provides a service more effectively than any member could by acting alone.

Accepted Answer

A) True 
 B)False

Question 6

In the United States, approximately 72 percent of all businesses are

Accepted Answer

A)   corporations.
B)   partnerships.
C)   sole proprietorships.
D)   joint ventures.
E)   franchises.F) A) and B)
G) A) and C)

Question 7

A business partnership that is owned and managed like a corporation but taxed like a partnership is called a(n)

Accepted Answer

A)   limited partnership.
B)   master limited partnership.
C)   domestic partnership.
D)   alien partnership.
E)   limited-liability company.F) A) and B)
G) D) and E)

Question 8

What does it mean when someone says that a corporation is an artificial person created by law? In your answer, describe some things that an artificial person and a real person, like you, could both do.

Accepted Answer

When someone says that a corporation is ...

Question 9

Boeing is incorporated in Seattle, Washington. It has a large facility in Huntsville, Alabama, and is considered a(n)  ____ because it conducts business within Alabama.

Accepted Answer

A)   outsider
B)   domestic corporation
C)   foreign corporation
D)   tax write-off
E)   alien corporationF) D) and E)
G) B) and D)

Question 10

Most stockholders attend a corporation's annual meeting and vote in person.

Accepted Answer

A) True 
 B)False

Question 11

A master limited partnership is also known as a closed corporation.

Accepted Answer

A) True 
 B)False

Question 12

Twenty-five young investors decided that they want to start a dating service; however, they do not want to be held personally liable for losses of the company. They want to avoid double taxation. Which type of business organization would best fit the needs of these individuals?

Accepted Answer

A)   Corporation
B)   Closed corporation
C)   Partnership
D)   S-corporation
E)   Limited cooperativeF) A) and B)
G) C) and D)

Question 13

Mercedes-Benz, which is chartered as a corporation in Germany but conducts much of its business in the United States, is known as a(n)  ____ in the United States.

Accepted Answer

A)   foreign corporation
B)   alien corporation
C)   domestic corporation
D)   S-corporation
E)   private corporationF) A) and C)
G) None of the above

Question 14

A voluntary association of two or more people acting as co-owners of a business is known as a partnership.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is true?

Accepted Answer

A)   Economists and financial analysts agree that mergers are good for the economy.
B)   Takeovers always increase a firm's productivity.
C)   Mergers in the first part of the twenty-first century will see an increase in debt financing.
D)   Mergers in the first part of the twenty-first century will be driven by cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.
E)   There will be fewer mergers that involve investors from other countries.F) C) and D)
G) C) and E)

Question 16

Mark owns stock in Walgreens. He has the right to vote on company issues and examine corporate records, and he receives dividends from Walgreens' profits. What type of stock does Mark own?

Accepted Answer

A)   Common
B)   "A" class
C)   Proxy
D)   Dividend
E)   PreferredF) C) and D)
G) All of the above

Question 17

The corporation, partnership, and sole proprietorship are the three most common forms of business ownership in the United States.

Accepted Answer

A) True 
 B)False

Question 18

Because of rising fuel costs, a group of farmers have organized a retail gasoline outlet so they can make more reasonable purchases. This type of business is referred to as a(n)

Accepted Answer

A)   syndicate.
B)   cooperative.
C)   joint venture.
D)   corporation.
E)   S-corporation.F) All of the above
G) D) and E)

Question 19

What types of information should a partnership agreement contain?

Accepted Answer

A partnership agreement is a formal docu...

Question 20

Why does the IRS allow some corporations to use the S-corporation form of ownership?

Accepted Answer

The Internal Revenue Service (IRS) allow...

Exam 4: Choosing a Form of Business Ownership

Mercedes-Benz, which is chartered as a corporation in Germany but conducts much of its business in the United States, is known as a(n) ____ in the United States.

Correct AnswerverifiedShow Answer

Corporate officers are

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

In the United States, approximately 72 percent of all businesses are

Correct AnswerverifiedShow Answer

Mark owns stock in Walgreens. He has the right to vote on company issues and examine corporate records, and he receives dividends from Walgreens' profits. What type of stock does Mark own?

Correct AnswerverifiedShow Answer

Why does the IRS allow some corporations to use the S-corporation form of ownership?

Correct AnswerAnswered by ExamLex AIThe Internal Revenue Service (IRS) allow...View AnswerShow Answer

Lisa and John own a partnership that provides rental equipment for parties and special occasions. Which of the following is true about the way Lisa and John would handle company profits?

Correct AnswerverifiedShow Answer

Because of rising fuel costs, a group of farmers have organized a retail gasoline outlet so they can make more reasonable purchases. This type of business is referred to as a(n)

Correct AnswerverifiedShow Answer

A master limited partnership is also known as a closed corporation.

Correct AnswerverifiedShow Answer

What does it mean when someone says that a corporation is an artificial person created by law? In your answer, describe some things that an artificial person and a real person, like you, could both do.

Correct AnswerAnswered by ExamLex AIWhen someone says that a corporation is ...View AnswerShow Answer

What types of information should a partnership agreement contain?

Correct AnswerAnswered by ExamLex AIA partnership agreement is a formal docu...View AnswerShow Answer

Twenty-five young investors decided that they want to start a dating service; however, they do not want to be held personally liable for losses of the company. They want to avoid double taxation. Which type of business organization would best fit the needs of these individuals?

Correct AnswerverifiedShow Answer

A business partnership that is owned and managed like a corporation but taxed like a partnership is called a(n)

Correct AnswerverifiedShow Answer

The corporation, partnership, and sole proprietorship are the three most common forms of business ownership in the United States.

Correct AnswerverifiedShow Answer

A voluntary association of two or more people acting as co-owners of a business is known as a partnership.

Correct AnswerverifiedShow Answer

A cooperative provides a service more effectively than any member could by acting alone.

Correct AnswerverifiedShow Answer

Most stockholders attend a corporation's annual meeting and vote in person.

Correct AnswerverifiedShow Answer

Which of the following is not a disadvantage of the corporate form of ownership?

Correct AnswerverifiedShow Answer

Which of the following is a requirement for an S-corporation?

Correct AnswerverifiedShow Answer

Boeing is incorporated in Seattle, Washington. It has a large facility in Huntsville, Alabama, and is considered a(n) ____ because it conducts business within Alabama.

Correct AnswerverifiedShow Answer

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The Internal Revenue Service (IRS) allow...
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Answered by ExamLex AI
When someone says that a corporation is ...
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A partnership agreement is a formal docu...
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