BUL3310 Unit 13 Quiz
Vic and Thom bought an antique Corvette at auction with the intent of restoring it and selling it for a profit, which they will share equally. Vic and Thom have formed a professional association. A. True B. False
B. False
What is the provision of the tax rule that makes income taxable only for the individuals who receive it, and not for the business entity that produces it? A. Double taxation B. Pass through C. Dividend retention D. Income averaging
B. Pass through
Subchapter S corporation will avoid double taxation only if which of the following applies? A. All the shareholders agree to be taxed as in a partnership. B. The corporation files Articles of Partnership in the state where it has its principal place of business. C. The corporation has no retained earnings D. All of the above are necessary to avoid double taxation.
A. All the shareholders agree to be taxed as in a partnership.
Partnership agreements often fund the purchase of a deceased partners' partnership interests with A. Life insurance policies B. Distributions of retained earnings C. Levies on partnership interests D. Partner advances
A. Life insurance policies
Corporations are said to have a burden of "double tax" because A. Profits are taxed at the corporate level as income and again at the shareholder level as dividends. B. Corporations are taxed at both the state and federal level. C. Corporations must file federal tax returns twice a year because their taxing period runs for only 6 months. D. Corporations compute their federal tax liability by multiplying their state tax liability by 2.
A. Profits are taxed at the corporate level as income and again at the shareholder level as dividends.
An advantage to doing business as a corporation is that ownership interests can be transferred without impact on day-to-day business operations. A. True B. False
A. True
In a Limited Liability Company, the losses and profits pass through to the shareholders. A. True B. False
A. True
Partners are agents of the partnership and of the other partners individually. A. True B. False
A. True
The admission of a new partner automatically dissolves the partnership. A. True B. False
A. True
Phil has a 1/4 partnership interest in Green & Sons. He has been denied access to the partnership books and records for over a year and he suspects that one of the partners has been engaging in secret business transactions using partnership funds. Phil wants to know the status of the business. Phil's remedy in this situation is to go to a court of equity for an ______________. A. Charging order B. Marshalling order C. Accounting D. Decree of insolvency
C. Accounting
Which of the following abbreviations would NOT be used by a professional corporation as a required part of its name? A. S.C. B. PC C. LLC D. Inc.
C. LLC
The business entity that consists in an association of two or more persons to carry on as co-owners a business for profit is an__________. A. Limited partnership B. Limited liability company C. Partnership D. Professional association
C. Partnership
A partnership whose primary business purpose is the buying and selling of goods is a ________partnership. A. Professional B. Entrepreneurial C. Trading D. Non-trading
C. Trading
Subchapter S corporations are limited to _________shareholders. A. 10 B. 35 C. 100 D. There is no limit to the number of shareholders in a Subchapter S corporation.
B. 35
The maximum number of shareholders a Subchapter S corporation may have is A. 25 B. 35 C. 100 D. 1000
B. 35
If a partner assigns his or her interest in a partnership to a creditor, the assignee steps into the shoes of the partner and becomes entitled to participate in the management of the business. A. True B. False
B. False
If a personal creditor of Partner A wants to attach A's partnership interest in satisfaction of the debt, he would do so through a marshalling order. A. True B. False
B. False
Partnerships are required to use the term "Company" in their names. A. True B. False
B. False
Which of the following would bring about the dissolution of the partnership? A. The time the partnership is to last, as stated in the partnership agreement, has expired B. All of the partners agree to end the partnership C. One of the partners dies. D. All of the above would bring about the dissolution of a partnership
D. All of the above would bring about the dissolution of a partnership