Acct 324 - Ch. 35

Which of the following is not a type of partnership? Multiple choice question. Limited liability partnership Limited partnership General partnership Conglomerate

Conglomerate

Which of the following specialized forms of business organizations is defined as an organization formed by individuals who pool resources to gain a market advantage? Multiple choice question. Business trust Cooperative Syndicate Joint stock company

Cooperative

Which of the following is not a type of partnership? Multiple choice question. Joint venture Cooperative S-corporation Franchise

S-corporation

Which specialized form of business organization is an investment group that comes together for the explicit purpose of financing a specific large project? Multiple choice question. Cooperative Business trust Joint stock company Syndicate

Syndicate

Which form of business organization is a legal entity formed by selling shares of stock to investors? Multiple choice question. Sole Proprietorship Corporation Syndicate General partnership

Corporation

Which of the following is not an advantage of operating a business as a sole proprietorship? Multiple choice question. Immunity from personal liability Minimal legal formalities in start-up Single taxation Managerial control

Immunity from personal liability

Which of the following statements is true of an S corporation? Multiple choice question. It cannot have less than 500 shareholders. It is a corporation under federal tax law but is taxed like a partnership as long as it follows certain regulations. It is formed under various state laws. The shareholders of an S corporation must report the income from the corporation on their business income tax forms.

It is a corporation under federal tax law but is taxed like a partnership as long as it follows certain regulations.

What form of business organization is a voluntary association between two or more persons who co-own a business for profit? Multiple choice question. Partnership Limited liability company Corporation Sole proprietorship

Partnership

Which of the following statements is true of a business trust? Multiple choice question. The trustees and beneficiaries of a business trust enjoy limited liability. A business trust is a relationship between two or more corporations created for a specific business undertaking. A business trust is taxed like a sole proprietorship in most states. A written trust agreement establishes the duties of the beneficiaries toward the trustees.

The trustees and beneficiaries of a business trust enjoy limited liability.

In a sole proprietorship, profits are taxed: _______. Multiple choice question. not at all as personal income as business income as capital gains

as personal income

The ______ liability company is an unincorporated form of business organization that combines the most advantageous features of partnerships and corporations. Multiple choice question. unlimited individual joint limited

limited

The ______ governs voluntary associations between two or more people who co-own a business for profit in most states in the absence of an express agreement. Multiple choice question. Shop and Establishment Act Sarbanes-Oxley Act Securities Exchange Act Uniform Partnership Act

Uniform Partnership Act

If the franchisee does not meet the requirements in the franchise agreement, the franchisor can terminate it, but must give sufficient Multiple choice question. notice. consideration. reciprocity. compensation.

notice.

A(n) ______ is an investment group that comes together for the explicit purpose of financing a specific large project. Multiple choice question. syndicate joint venture franchise LLC

syndicate

In a ______, all the partners assume liability for one partner's professional malpractice, but only to the extent of the partnership's assets. Multiple choice question. limited liability company general partnership limited liability partnership limited partnership

limited liability partnership

A limited liability company is formed by filing articles of ______ in the state in which its members want to establish their company. Multiple choice question. incorporation independence organization federation

organization

A(n) ______ is terminated automatically when the owner dies. Multiple choice question. sole proprietorship limited liability company corporation S-corporation

sole proprietorship

If you want to open a lawn-mowing business on your own and want to be in complete control of the management and profits of the business, you should most likely create a(n) ______. Multiple choice question. syndicate S-corporation general partnership sole proprietorship

sole proprietorship

The most frequently cited advantage of the limited liability company is that for tax purposes, the Internal Revenue Service generally treats the limited liability company like a(n) ______ or ______. Multiple choice question. sole proprietorship; partnership corporation; S corporation partnership; corporation corporation; sole proprietorship

sole proprietorship; partnership

Identify a true statement about a limited liability partnership (LLP). Multiple choice question. Each partner in an LLP pays taxes on the total income of the business. Each partner in an LLP is responsible for his or her own negligence and the negligence of those that he or she supervises. An LLP consists of a general partner and a limited partner who plays no role in the management of the business. An LLP is considered a separate legal entity in most states.

Each partner in an LLP is responsible for his or her own negligence and the negligence of those that he or she supervises.

A(n) ______ partnership is an agreement between at least one general partner and at least one limited partner. Multiple choice question. cooperative limited liability limited general

limited

Which of the following is not an advantage of operating a business as a sole proprietorship? Multiple choice question. Managerial control Articles of organization promote managerial efficiency Minimal legal formalities in start-up Sole proprietor keeps all profits from the business

Articles of organization promote managerial efficiency

Which form of business organization is defined as a relationship between two or more persons or corporations created for a specific business undertaking? Multiple choice question. General partnership Limited liability company Joint venture Limited partnership

Joint venture

Which of the following is an accurate statement regarding franchisee purchase of supplies from the franchisor? Multiple choice question. The franchisor may never require the franchisee to purchase supplies from another franchisee. The franchisor may require the franchisee to purchase certain supplies from the franchisor at a set price. The franchisor may establish the price at which the franchisee sells the goods. The franchisor may never sell supplies to the franchisee.

The franchisor may require the franchisee to purchase certain supplies from the franchisor at a set price.

Which of the following is an accurate statement regarding operation of a limited liability company? Multiple choice question. To obtain limited liability, a member does not have to relinquish his or her right to participate in management. A limited liability company is required to draft meeting minutes. The owners of a limited liability company are called shareholders. A limited liability company is required to allocate profits and losses in proportion to ownership interests. A limited liability company is required to hold an annual meeting.

To obtain limited liability, a member does not have to relinquish his or her right to participate in management.

An S corporation cannot have more than ______ shareholders. Multiple choice question. 75 25 50 100

100

Which of the following is not a specialized form of business organization? Multiple choice question. Joint venture Business trust Syndicate Corporate partnership

Corporate partnership

Which of the following is not a disadvantage of operating a business as a sole proprietorship? Multiple choice question. Double taxation of profits Personal liability for business debts Automatic termination upon owner's death Limited funding

Double taxation of profits

Which specialized form of business organization exists because of an arrangement between the owner of a trade name or trademark and the person who sells goods or services under the trade name or trademark? Multiple choice question. Cooperative Franchise Syndicate Joint venture

Franchise

In a sole proprietorship, profits are taxed: _______. Multiple choice question. as capital gains not at all as business income as personal income

as personal income

The major forms of business organizations in the United States include the sole proprietorship, the partnership, the corporation, and the ______ liability company. Multiple choice question. strict limited absolute unlimited

limited

In which form of business organization is the owner in sole control of management and profits? Multiple choice question. Corporation Sole proprietorship S-corporation Syndicate

Sole proprietorship

The ______ combines the tax advantages and management flexibility of a partnership with the limited liability of a corporation. Multiple choice question. limited liability company business trust limited partnership joint stock company

limited liability company

Which of the following is a specialized form of business organization? Multiple choice question. Business trust Amalgamated venture Corporate partnership Unlimited partnership

Business trust

Which of the following is a specialized form of business organization? Multiple choice question. Unlimited partnership Corporate partnership Business trust Amalgamated venture

Business trust

Which specialized form of business organization is governed by a group of trustees who operate the organization for the beneficiaries? Multiple choice question. Joint venture Joint stock company Syndicate Business trust

Business trust

Which of the following is a disadvantage of a franchise for the franchisor? Multiple choice question. Earns increased income from the franchise Has little control over the franchise Takes low risk in starting a franchise Not liable for the franchise if it exerts only minimal control

Has little control over the franchise

Which of the following is an accurate statement regarding the legal identity of a partnership? Multiple choice question. A partnership is considered a legal entity with an identity separate from its owners. In most cases, a partnership is not considered a legal entity separate from its owners. A partnership is a type of corporation. Since a partnership is considered a legal entity, taxing authorities have the right to assess a partnership tax. The United States Supreme Court has determined that a partnership is a person for the purposes of the First Amendment to the Constitution.

In most cases, a partnership is not considered a legal entity separate from its owners.

Which of the following forms of business organizations is an agreement between at least one general partner and at least one limited partner? Multiple choice question. Limited liability proprietorship Limited partnership Professional limited liability company Limited liability company

Limited partnership

Which of the following is an accurate statement regarding partner liability for partnership debts? Multiple choice question. Partners have conditional personal liability for partnership debts. Although a partner is not personally liable for the malpractice of another partner, he or she is responsible for ordinary partnership debts. Partners are not personally liable for partnership debts. Partners have unlimited personal liability for partnership debts.

Partners have unlimited personal liability for partnership debts.

In which of the following forms of business organizations are owners personally liable for business debts? Multiple choice question. Partnership Limited liability company S-corporation C-Corporation

Partnership

The major forms of business organizations in the United States include all of the following except: _______. Multiple choice question. family enterprise partnership corporation sole proprietorship

family enterprise

A(n) ______ is a business organization that exists because of an arrangement between the owner of a trade name or trademark and the person who sells goods or services under the trade name or trademark. Multiple choice question. cooperative franchise joint stock company business trust

franchise

In a ______, the partners divide the profits and the management responsibilities. Multiple choice question. corporate partnership sole proprietorship general partnership co-proprietorship

general partnership

In a(n) ______, the partners share unlimited personal liability for the firm's debts. Multiple choice question. unlimited liability company limited partnership corporation general partnership

general partnership

A(n) ______ company is a partnership agreement in which company members hold transferable shares, while all the goods of the company are held in the names of the partners. Multiple choice question. corporate joint stock franchise limited liability

joint stock

A(n) ______ is a relationship between two or more persons or corporations created for a specific business undertaking. Multiple choice question. joint venture general partnership limited partnership LLC

joint venture

Corporate shareholders have ______ liability for corporate debts. Multiple choice question. personal limited exclusive unlimited

limited

Much of the litigation associated with franchises involves wrongful ______ of the franchise. Multiple choice question. termination motive hiring acquisition

termination

Which of the following is an accurate statement regarding the partnership agreement? Multiple choice question. No partnership agreement of any kind is required to form a partnership. A written partnership agreement is required to form a partnership. A written partnership agreement is not required to form a partnership. An official partnership agreement is required to form a partnership.

A written partnership agreement is not required to form a partnership.

When members form an LLC, they typically draft a(n) _______, which is the foundational contract among the entity's owners. Multiple choice question. formation agreement operating articles articles of formation operating agreement

operating agreement

Which of the following is a disadvantage of a corporation? Multiple choice question. Profits from the business are taxed as income to the partners, not to the shareholders. It is difficult to raise capital by issuing stock. Shareholders have unlimited liability for the management of the corporation. Formalities are required in establishing and maintaining the corporate form of business.

Formalities are required in establishing and maintaining the corporate form of business.

The franchisor usually includes in the ______ those business standards that must be met, such as for cleanliness. Multiple choice question. operating agreement stock agreement certificate of filing franchise agreement

franchise agreement

The most frequently cited advantage of the limited liability company is that for tax purposes, the Internal Revenue Service generally treats the limited liability company like a(n) ______ or ______. Multiple choice question. sole proprietorship; partnership partnership; corporation corporation; S corporation corporation; sole proprietorship

sole proprietorship; partnership

Which of the following is an advantage of a franchise for the franchisor? Multiple choice question. Can become liable for the franchise if it exerts too much control Takes low risk in starting a franchise Earns decreased income from the franchise Has great control over the franchise

Takes low risk in starting a franchise

A(n) ______ is a business organization formed by individuals who usually pool their resources to gain an advantage in the market. Multiple choice question. cooperative joint stock company limited partnership franchise

cooperative

Which specialized form of business organization is defined as a partnership agreement in which company members hold transferable shares, while all the goods of the company are held in the names of the partners? Multiple choice question. Syndicate Business trust Cooperative Joint stock company

Joint stock company