Question 1

Why is a sole proprietorship the most flexible type of business?

Accepted Answer

A sole proprietorship is considered the ...

Question 2

Suppose Bill Gates, founder of Microsoft, is interested in a small software company. He may offer to purchase the stock of this company at a price that is just high enough to tempt the current stockholders. This action would be called a

Accepted Answer

A)   monopoly.
B)   tender offer.
C)   proxy fight.
D)   hostile takeover.
E)   white knight offer.F) None of the above
G) C) and E)

Question 3

Quarrels among business associates have become common. The associates quarrel over what products the firm should sell, division of authority, selection of personnel, whether to bring family members into the business, whether to expand, and who is contributing most to the firm's success. Such feuding, which damages business relationships, occurs most frequently in what form of business?

Accepted Answer

A)   Partnerships
B)   Cooperatives
C)   Corporations
D)   Sole proprietorships
E)   S-corporationsF) B) and C)
G) B) and E)

Question 4

Because there are two or more people in a general partnership, bankers, suppliers, and other creditors are not concerned about unlimited liability.

Accepted Answer

A) True 
 B)False

Question 5

The major reason why businesses change from sole proprietorships to other forms of ownership is to

Accepted Answer

A)   gain unlimited liability.
B)   avoid unlimited liability.
C)   avoid lack of continuity.
D)   obtain help and eliminate the problem of too much to do in one day.
E)   offer advancement opportunities for employees.F) B) and E)
G) A) and E)

Question 6

When incorporating, a business

Accepted Answer

A)   may incorporate in any state it chooses.
B)   must incorporate in the state in which its headquarters are located.
C)   must incorporate in the state in which it does the most business.
D)   must receive the secretary of state's permission to incorporate in any state other than the one in which its corporate headquarters will be located.
E)   must do none of the above.F) A) and D)
G) A) and C)

Question 7

Brian wants to start a business that provides canoe and kayak trips. He decides that it would be better to ask his brother Brad to become his partner because

Accepted Answer

A)   one person could not possibly run this type of business.
B)   Brian will receive all of the profits from the partnership.
C)   together they will be able to get more capital and credit to start the business.
D)   the business will pay less taxes than it would as a sole proprietorship.
E)   there are generally fewer control issues in a partnership than in a sole proprietorship.F) All of the above
G) A) and D)

Question 8

Compared to a corporation, a partnership is more difficult and expensive to establish.

Accepted Answer

A) True 
 B)False

Question 9

Wade serves on Foot Locker's board of directors. How did Wade get this position?

Accepted Answer

A)   He volunteered for the assignment.
B)   He was appointed by the chief executive officer.
C)   He was assigned by the Federal Trade Commission.
D)   Through default as the largest stockholder, Wade got the position.
E)   He was elected by the company's stockholders.F) A) and B)
G) A) and E)

Question 10

What does double taxation mean?

Accepted Answer

A)   Companies must pay taxes on their income, and then employees must pay taxes on their salaries and wages.
B)   Companies have to pay both sales taxes and income taxes.
C)   Companies must pay taxes on their earnings, and then stockholders pay taxes on their dividends.
D)   Suppliers tax their customers, and in turn these businesses tax the ultimate consumer.
E)   Companies must pay taxes on corporate income and then additional taxes on distributions to profit stockholders.F) A) and B)
G) C) and D)

Question 11

Explain the differences among a domestic, a foreign, and an alien corporation.

Accepted Answer

A domestic corporation is one that is in...

Question 12

If the owner of a sole proprietorship retires or dies, the owner's heirs may take over a profitable business and either sell it or continue to operate it.

Accepted Answer

A) True 
 B)False

Question 13

Experts predict that mergers in the first part of the twenty-first century will be the result of cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not an advantage of a sole proprietorship?

Accepted Answer

A)   It is easy to form and dissolve.
B)   It has unlimited liability.
C)   Profits are taxed as personal income.
D)   There owner has the flexibility of being his or her own boss.
E)   The owner keeps all profits.F) A) and B)
G) A) and C)

Question 15

Corporations account for about 95 percent of all sales revenues.

Accepted Answer

A) True 
 B)False

Question 16

The person who assumes full co-ownership of a partnership, including unlimited liability, is a

Accepted Answer

A)   sole proprietor.
B)   stockholder.
C)   shareholder.
D)   limited partner.
E)   general partner.F) B) and C)
G) None of the above

Question 17

Describe the advantages and disadvantages of a corporation.

Accepted Answer

Corporations have several advantages, in...

Question 18

In a limited partnership, a limited partner's name must be included in the partnership's name.

Accepted Answer

A) True 
 B)False

Question 19

Most partnerships have ____ partners.

Accepted Answer

A)   two
B)   three
C)   four
D)   five
E)   more than fiveF) A) and D)
G) A) and C)

Question 20

As a limited partner in a construction business, Joe

Accepted Answer

A)   has input only on major company decisions.
B)   contributes only his time and not his money.
C)   does not receive any portion of the profits.
D)   only risks his initial investment.
E)   cannot lose his investment in the partnership.F) All of the above
G) None of the above

Exam 4: Choosing a Form of Business Ownership

What does double taxation mean?

Correct Answer
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Correct Answer
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Most partnerships have ____ partners.

Correct Answer
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When incorporating, a business

Correct Answer
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Experts predict that mergers in the first part of the twenty-first century will be the result of cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.

Correct Answer
verified

As a limited partner in a construction business, Joe

Correct Answer
verified

Why is a sole proprietorship the most flexible type of business?

Correct Answer
Answered by ExamLex AI
A sole proprietorship is considered the ...
View Answer

Corporations account for about 95 percent of all sales revenues.

Correct Answer
verified

Explain the differences among a domestic, a foreign, and an alien corporation.

Correct Answer
Answered by ExamLex AI
A domestic corporation is one that is in...
View Answer

The person who assumes full co-ownership of a partnership, including unlimited liability, is a

Correct Answer
verified

Brian wants to start a business that provides canoe and kayak trips. He decides that it would be better to ask his brother Brad to become his partner because

Correct Answer
verified

The major reason why businesses change from sole proprietorships to other forms of ownership is to

Correct Answer
verified

If the owner of a sole proprietorship retires or dies, the owner's heirs may take over a profitable business and either sell it or continue to operate it.

Correct Answer
verified

Suppose Bill Gates, founder of Microsoft, is interested in a small software company. He may offer to purchase the stock of this company at a price that is just high enough to tempt the current stockholders. This action would be called a

Correct Answer
verified

Which of the following is not an advantage of a sole proprietorship?

Correct Answer
verified

Describe the advantages and disadvantages of a corporation.

Correct Answer
Answered by ExamLex AI
Corporations have several advantages, in...
View Answer

In a limited partnership, a limited partner's name must be included in the partnership's name.

Correct Answer
verified

Wade serves on Foot Locker's board of directors. How did Wade get this position?

Correct Answer
verified

Because there are two or more people in a general partnership, bankers, suppliers, and other creditors are not concerned about unlimited liability.

Correct Answer
verified

Compared to a corporation, a partnership is more difficult and expensive to establish.

Correct Answer
verified

Exam 4: Choosing a Form of Business Ownership

What does double taxation mean?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Most partnerships have ____ partners.

Correct AnswerverifiedShow Answer

When incorporating, a business

Correct AnswerverifiedShow Answer

Experts predict that mergers in the first part of the twenty-first century will be the result of cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.

Correct AnswerverifiedShow Answer

As a limited partner in a construction business, Joe

Correct AnswerverifiedShow Answer

Why is a sole proprietorship the most flexible type of business?

Correct AnswerAnswered by ExamLex AIA sole proprietorship is considered the ...View AnswerShow Answer

Corporations account for about 95 percent of all sales revenues.

Correct AnswerverifiedShow Answer

Explain the differences among a domestic, a foreign, and an alien corporation.

Correct AnswerAnswered by ExamLex AIA domestic corporation is one that is in...View AnswerShow Answer

The person who assumes full co-ownership of a partnership, including unlimited liability, is a

Correct AnswerverifiedShow Answer

Brian wants to start a business that provides canoe and kayak trips. He decides that it would be better to ask his brother Brad to become his partner because

Correct AnswerverifiedShow Answer

The major reason why businesses change from sole proprietorships to other forms of ownership is to

Correct AnswerverifiedShow Answer

If the owner of a sole proprietorship retires or dies, the owner's heirs may take over a profitable business and either sell it or continue to operate it.

Correct AnswerverifiedShow Answer

Suppose Bill Gates, founder of Microsoft, is interested in a small software company. He may offer to purchase the stock of this company at a price that is just high enough to tempt the current stockholders. This action would be called a

Correct AnswerverifiedShow Answer

Which of the following is not an advantage of a sole proprietorship?

Correct AnswerverifiedShow Answer

Describe the advantages and disadvantages of a corporation.

Correct AnswerAnswered by ExamLex AICorporations have several advantages, in...View AnswerShow Answer

In a limited partnership, a limited partner's name must be included in the partnership's name.

Correct AnswerverifiedShow Answer

Wade serves on Foot Locker's board of directors. How did Wade get this position?

Correct AnswerverifiedShow Answer

Because there are two or more people in a general partnership, bankers, suppliers, and other creditors are not concerned about unlimited liability.

Correct AnswerverifiedShow Answer

Compared to a corporation, a partnership is more difficult and expensive to establish.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
A sole proprietorship is considered the ...
View Answer

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
A domestic corporation is one that is in...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
Corporations have several advantages, in...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified