Question 1

Which of the following tasks is NOT the responsibility of the board of directors?

Accepted Answer

A)   setting policies for the corporation
B)   authorizing the issuance of stock
C)   electing corporate officers
D)   managing the company's daily operations
E)   approving loans to and from the corporationF) A) and C)
G) B) and E)

Question 2

A sole proprietorship is a common form of business ownership for start-up businesses.

Accepted Answer

A) True 
 B)False

Question 3

The profits of a sole proprietorship are taxed as the personal income of the owner.

Accepted Answer

A) True 
 B)False

Question 4

A(n) ________ acquisition occurs when one company tries to take control over another company against its wishes.

Accepted Answer

A)   proxy
B)   hostile
C)   horizontal
D)   extension
E)   conglomerationF) B) and D)
G) A) and E)

Question 5

A corporation is a specific form of business that is legally formed under state laws and is considered a separate entity.

Accepted Answer

A) True 
 B)False

Question 6

All of the following are reasons business owners consider using a corporation structure of ownership EXCEPT ________.

Accepted Answer

A)   the appearance of stability and legitimacy
B)   protection from significant loss of personal assets
C)   ease of forming and setting up the structure
D)   eased ability of raising capital
E)   ease of transferring ownershipF) B) and E)
G) C) and E)

Question 7

A(n) ________ occurs when two companies of about the same size mutually agree to create a new combined company.

Accepted Answer

A)   merger
B)   acquisition
C)   takeover
D)   synergy
E)   cooperativeF) B) and C)
G) A) and B)

Question 8

Limited liability companies are unable to offer stock options or stock bonus incentives to their employees because ________.

Accepted Answer

A)   benefits such as these are too costly for these types of start-up companies
B)   extra profits are reinvested into the company, not into company stocks
C)   limited liability companies do not have shareholders or stock
D)   approval of stock benefits is difficult due to the number of members
E)   LLC members are limited to just U.S. residentsF) A) and C)
G) B) and D)

Question 9

The biggest difference between general and limited partnerships involves who accepts most of the business liability.

Accepted Answer

A) True 
 B)False

Question 10

Partnerships are taxed at the lowest corporate tax rate.

Accepted Answer

A) True 
 B)False

Question 11

Many citrus farmers and growers in the United States have direct and low-cost access to packing houses.As such,they are able to directly process their harvest through these packing houses,limiting the cost of production of packed citrus products.What attribute of a cooperative is shown in this situation?

Accepted Answer

Cooperatives provide services to members...

Question 12

Which of the following is a benefit of forming a corporation?

Accepted Answer

A)   Corporations can be double taxed.
B)   Owners of a corporation are passive investors.
C)   Owners of a corporation are subject to unlimited liability.
D)   Corporations can offer stock options to employees.
E)   There is little paperwork to file when forming a corporation.F) C) and E)
G) B) and D)

Question 13

Many new business owners prefer a limited liability structure because there are ________.

Accepted Answer

A)   fewer corporate formalities
B)   fewer lawsuits
C)   typically higher profits than other forms of ownership
D)   more informal agreements
E)   limits on the number of membersF) A) and E)
G) A) and C)

Question 14

If you want to terminate your ownership in a publicly traded corporation,you simply sell your shares.

Accepted Answer

A) True 
 B)False

Question 15

When a not-for-profit corporations dissolves,its assets are ________.

Accepted Answer

A)   transferred to the federal government
B)   distributed among major donors
C)   passed to the owners' families
D)   given to a similar not-for-profit group
E)   seized by the stateF) A) and C)
G) A) and D)

Question 16

A proxy fight occurs when a company attempts to persuade the target company's shareholders to replace the existing management with one that is ________ the goals of the acquiring company.

Accepted Answer

A)   unaware of
B)   hostile toward
C)   familiar with
D)   sympathetic to
E)   ambivalent aboutF) A) and B)
G) C) and E)

Question 17

Which of the following statements about the operation of a corporation is correct?

Accepted Answer

A)   A corporation is a separate entity and is legally formed under state laws.
B)   A corporation automatically expires in 99 years and must be renewed if a corporation wants to remain in business.
C)   Owners of a corporation have unlimited liability for any claims against their company.
D)   A corporation tends to be much easier to set up than a sole proprietorship or partnership.
E)   All profits and losses flow through the corporation owners' personal tax returns.F) None of the above
G) B) and C)

Question 18

Jenny and Rose are hairstylists that have decided to open their own salon by starting a general partnership.The first step to ensuring a successful partnership would be to ________.

Accepted Answer

A)   guarantee that they each have 25 clients to bring into the partnership
B)   submit the partnership formation fee to the state
C)   draw up a partnership agreement
D)   submit the limited liability forms before they see clients
E)   arrange for the special tax filing considerations a partnership requiresF) D) and E)
G) C) and E)

Question 19

Companies MOST often resort to mergers and acquisitions when they want to expand their markets and product lines because ________.

Accepted Answer

A)   it minimizes conflicts that are rooted on hidden agendas and power struggles
B)   it minimizes time and investment to research and develop new products
C)   upper management prefers to concentrate on day-to-day activities
D)   employees are motivated to work harder because of the resulting stability
E)   more than 70 percent of all mergers exceed financial expectationsF) D) and E)
G) A) and C)

Question 20

One disadvantage of sole proprietorship is the ________.

Accepted Answer

A)   possibility of disagreements between different owners
B)   unlimited liability the owner has for the debts of the company
C)   fact that any income earned by this type of business is taxed twice
D)   cost of starting or ending the company is higher than other businesses
E)   burden of all the required paperwork that must be filedF) A) and B)
G) D) and E)

Exam 6: Forms of Business Ownership

One disadvantage of sole proprietorship is the ________.

Correct Answer
verified

A corporation is a specific form of business that is legally formed under state laws and is considered a separate entity.

Correct Answer
verified

Many new business owners prefer a limited liability structure because there are ________.

Correct Answer
verified

The profits of a sole proprietorship are taxed as the personal income of the owner.

Correct Answer
verified

Which of the following statements about the operation of a corporation is correct?

Correct Answer
verified

Which of the following is a benefit of forming a corporation?

Correct Answer
verified

If you want to terminate your ownership in a publicly traded corporation,you simply sell your shares.

Correct Answer
verified

When a not-for-profit corporations dissolves,its assets are ________.

Correct Answer
verified

A proxy fight occurs when a company attempts to persuade the target company's shareholders to replace the existing management with one that is ________ the goals of the acquiring company.

Correct Answer
verified

Limited liability companies are unable to offer stock options or stock bonus incentives to their employees because ________.

Correct Answer
verified

A(n) ________ acquisition occurs when one company tries to take control over another company against its wishes.

Correct Answer
verified

Jenny and Rose are hairstylists that have decided to open their own salon by starting a general partnership.The first step to ensuring a successful partnership would be to ________.

Correct Answer
verified

Correct Answer
verified
Cooperatives provide services to members...
View Answer

A sole proprietorship is a common form of business ownership for start-up businesses.

Correct Answer
verified

Companies MOST often resort to mergers and acquisitions when they want to expand their markets and product lines because ________.

Correct Answer
verified

Which of the following tasks is NOT the responsibility of the board of directors?

Correct Answer
verified

The biggest difference between general and limited partnerships involves who accepts most of the business liability.

Correct Answer
verified

A(n) ________ occurs when two companies of about the same size mutually agree to create a new combined company.

Correct Answer
verified

All of the following are reasons business owners consider using a corporation structure of ownership EXCEPT ________.

Correct Answer
verified

Partnerships are taxed at the lowest corporate tax rate.

Correct Answer
verified

Exam 6: Forms of Business Ownership

One disadvantage of sole proprietorship is the ________.

Correct AnswerverifiedShow Answer

A corporation is a specific form of business that is legally formed under state laws and is considered a separate entity.

Correct AnswerverifiedShow Answer

Many new business owners prefer a limited liability structure because there are ________.

Correct AnswerverifiedShow Answer

The profits of a sole proprietorship are taxed as the personal income of the owner.

Correct AnswerverifiedShow Answer

Which of the following statements about the operation of a corporation is correct?

Correct AnswerverifiedShow Answer

Which of the following is a benefit of forming a corporation?

Correct AnswerverifiedShow Answer

If you want to terminate your ownership in a publicly traded corporation,you simply sell your shares.

Correct AnswerverifiedShow Answer

When a not-for-profit corporations dissolves,its assets are ________.

Correct AnswerverifiedShow Answer

A proxy fight occurs when a company attempts to persuade the target company's shareholders to replace the existing management with one that is ________ the goals of the acquiring company.

Correct AnswerverifiedShow Answer

Limited liability companies are unable to offer stock options or stock bonus incentives to their employees because ________.

Correct AnswerverifiedShow Answer

A(n) ________ acquisition occurs when one company tries to take control over another company against its wishes.

Correct AnswerverifiedShow Answer

Jenny and Rose are hairstylists that have decided to open their own salon by starting a general partnership.The first step to ensuring a successful partnership would be to ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedCooperatives provide services to members...View AnswerShow Answer

A sole proprietorship is a common form of business ownership for start-up businesses.

Correct AnswerverifiedShow Answer

Companies MOST often resort to mergers and acquisitions when they want to expand their markets and product lines because ________.

Correct AnswerverifiedShow Answer

Which of the following tasks is NOT the responsibility of the board of directors?

Correct AnswerverifiedShow Answer

The biggest difference between general and limited partnerships involves who accepts most of the business liability.

Correct AnswerverifiedShow Answer

A(n) ________ occurs when two companies of about the same size mutually agree to create a new combined company.

Correct AnswerverifiedShow Answer

All of the following are reasons business owners consider using a corporation structure of ownership EXCEPT ________.

Correct AnswerverifiedShow Answer

Partnerships are taxed at the lowest corporate tax rate.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Cooperatives provide services to members...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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