Intro to business chapter 4 quiz
False
The vast majority of economics and financial analyst agree that mergers are good for the United States economy
E
There are approximately how many partnerships in the United States; A. 975,000 B. 750,000 C. 3.8 million D. 2 million E. 3 million
False
The syndicate is a long term, permanent association of individuals or firms
False
A sole proprietorship is usually operated by more than one person
False
A joint venture can occur with a minimum of three groups of partners
False
A major disadvantage of sole proprietorship is that profits earned by a sole proprietorship are subject to the special state and federal income taxes the corporations pay
F
A partnership agreement should state; A. Who will make the final decisions B. What each partners duties will be C. The investment each partner will make D. How much profit or loss each partner receives or is responsible for E. What happens if a partner wants to dissolve the partnership or dies F. All of the above
False
A partnership can have a legal limit of no more than 12 partners
True
A vertical merger occurs between firms that operate a different but related levels of production and marketing
True
A way for a firm to grow is through the takeover of another firm
C
All of the following are benefits of the LLC form of ownership except; A. Limited liability B. No restricted number of owners C. Required annual meetings to provide information to owners D. Pass-through taxation
True
At least one general partner must be responsible for the debts of the limited partnership
False
Banks are more open to lending money to sole proprietorships then to any other type of business
True
Corporate officers are appointed by the board of directors
D
Corporations make up about______________ percent of all business and account for ________ of all sales revenues; A. 32; 40; B. 8; 50; C. 5; 92; D. 19; 82. E. 10; 90
True
Double taxation is a drawback of corporation business ownership
E
During college Ms. Wood earned extra money by using her computer skills to prepare papers for students. After graduation, she decided to turn her part-time job into a full-time business that she plans to expand in the future. In the meantime, she wants to maintain complete control of the business. She will most likely organize the business as a A. Cooperative B. General partnership C. Limited partnership D. Corporation E. Sole proprietorship
D
How are taxes calculated for a soul proprietorship? A. Profit on the business is taxed at exactly double what the personal income tax rate is. B. The profits are taxed at the same rate as the personal income of the owner and then again if the owner takes the profit out of the business. C. Profits for a sole proprietorship are double taxed just like the profit of a Corporation D. As with a partnership, the sole proprietorship pays no income tax but the profit is reported as personal income of the owner. E. A special sole proprietorship tax is added to the personal income tax that a sole proprietor pays
A
If you earned $.90 for each stock share that you own in a corporation, you have earned a; A. Dividend; B. Prox C. Cooperative; D. Stock share; E. Tender offer
True
In the eyes of the law, the owner of a sole proprietor ship and the business are one and the same
False
Limited partners participate in day-to-day business activities and operations
True
Most businesses incorporate in the states where they do most of their business
True
Most corporations grow by expanding their own present operations
False
Nonprofit laws are only federal and thus the same laws exist in all 50 states
B
Once a nonprofit corporation is approved it must meet the guidelines of the________________ to obtain tax exempt status; A. Small business development center; B. Internal revenue service; C. Small business Association; D. Registered state; E. Registered country
C
One of the two major reasons more than 700 New Hampshire corporations have converted to LLCs is to eliminate; A. Limited liability. B. Transfer of ownership C. Double taxation D. The expense of formation
True
One or more members of the Board of Directors are required for a corporation
True
Shares of ownership of a corporation are called stock
True
Small businesses generally only issue common stock
B
Stockholders directly A. apoint the corporate officers. B. Elect the Board of Directors. C. Hire the staff. D. Run the company. E. Decide employee bonuses
B
There are approximately______million non-farm sole proprietorships in the United States; A. 12 B. 23 C. 55 D. 40 E. 32
D
Which form of business has unlimited liability for all owners? A. C-corporation B. Closed corporation C. Limited partnership D. Sole proprietorship E. Master limited partnership
B
Which is the least popular form of business ownership; A. Sole proprietor B. Partnership C. Corporation D. Limited liability
D
Which item is not typically included in the articles of a partnership agreement? A. How the business will be dissolved. B. The investment each partner will make. C. The duties of each partner. D. A description of the target market. E. The length of the partnership
E
Which of the following is false statement regarding limited liability companies; A. The LLC type of organization provides more management flexibility when compared with corporations; B. An LLC is not restricted to 100 stockholders; C. An LLC extends the concept of personal asset protection to small business owners; D. An LLC enjoys pass through taxation; E. LLCs are not recognized in all 50 states
D
Which of the following is not a disadvantage of a corporation; A. Expense of formation; B. Difficulty of formation; C. Conflict within the corporation; D. Raising money E. Increased paperwork
E
Which of the following is not a qualification for S-corporation status; A. Only one class of stock; B. Decision agreed to by all stockholders; C. Must be a domestic Corporation; D. Individuals, estates, or certain trusts as stockholders; E. No more than 12 stockholders
B
Which of the following is not a right of corporations; A. The right to enter into a contract B. The right to all profits; C. The right to start a business; D. The right to buy property; E. The right to sue
C
Which of the following is true about an LLC? A. LLCs are restricted to 100 stockholders B. LLCs provide less management flexibility than corporations. C. LLCs enjoy passed through taxation. D. LLCs are double taxed. E. LLCs have unlimited liability for acts and Debts.
A
Which of the following types of business ownership is the easiest to start; A. Sole proprietorship B. General partnership C. Limited partnership D. Corporation E. Master limited partnership
