Ch 25 Business
A nonprofit corporation ... A)uses its profits to help society B)does not protect its owners from liability C)is also called a cooperative D)all of the answer choices
A
In a sole proprietorship, how many people are responsible for the business? A)one B)one or more C)at least two D)any number
A
Which type of business legal structure exposes its owner(s) to unlimited liability for its owner(s)? A)sole proprietorship B)nonprofit corporation C)C corporation D)S corporation
A
A C-corporation's earnings are taxed twice: once as the corporation's profits and then again on the dividends the shareholder earns True False
True
Even if you are best friends with your business partner, you should always ... A)incorporate B)use a partnership agreement C)register a sole proprietorship D)none of the above
B
Which of the following is NOT an advantage of a sole proprietorship? A)business income and costs are reported on the owner's personal tax return B)unlimited liability C)inexpensive to set up D)no partners to split profits with
B
Which advantage(s) does a general partnership have over a sole proprietorship? A)limited liability B)it has a lower tax rate C)more than one person for financial backing D)all of the above
C
What disadvantage(s) does a general partnership have over a sole proprietorship? A)profit is split between the partners B)partners may have trouble agreeing on policies C)each partner is responsible for the business actions of the others D)all answer choices
D
Which type of business legal structure has "double taxation?" A)sole proprietorship B)limited liability company C)nonprofit corporation D)C corporation
D
A C corporation is a business owned, controlled, and operated for the mutual benefit of its members. True False
False
A sole proprietorship provides its owner with limited liability for any business debt. True False
False
Limited liability means a business owner can be legally forced to use personal money and personal possessions to pay business debt. True False
False
The owner of a sole proprietorship has limited liability for any debts run up by the business. True False
False
The profits made by nonprofit corporations are distributed to its donors. True False
False
Unlimited liability means that a business owner cannot be legally forced to use personal money or sell personal possessions to pay the business's debts. True False
False
A business owner's liability is his or her legal obligation to use personal assets to pay the debts of the business. True False
True
A corporation is a business legal structure that considers the business a "person" under the law. True False
True
A partnership is a type of business organization in which at least two individuals share the management duties, profit, and liability. True False
True
A sole proprietor has the right to all the profit earned by his or her business. True False
True
A sole proprietorship is the simplest and least expensive option for a business legal structure. True False
True
Business owners with limited liability only risk the money they have invested in the business, but do not risk personal assets. True False
True
Each share in a corporation may earn its owner a dividend, which is a portion of the corporation's profit. True False
True
In a general partnership, all partners have unlimited liability. True False
True
The level of liability for a business owner is determined by the type of legal structure he or she chooses for the business. True False
True
