Chapter 4 business test

Aaron Medford has invested $600 in the corporate stock of a manufacturer of offshore oil drilling equipment. If the company goes bankrupt, the most Medford could lose would be:

$600

Double taxation is a distinct advantage that corporations have over other form of ownership

False

A ___ offers the same liability protection as a corporation but may be taxed as either a partnership or a corporation

Limited liability company

The fact that a corporation has limited liability mean

Owners liabilities are limited to the amount invested

The C corporation is another term for

The convention form of corporation

The form of business ownership that easiest to dissolve is the

sole propietorship

The most common form of business organization is the

sole propietorship

A type of business entity that provides liability protection but is taxed like a partnership is a

S corporation

Of all forms of business ownership, corporations account for the largest share of both:

Sales and profits

Before selling stock to the public, a corporation must register with the:

Securities and exchange commission

Jayson Tully is contemplating the purchase of a Popeye's Chicken franchise. Tully has made a list of the disadvantages that he assumes he will face as a new business owner. Which of the following is actually an advantage?

Assistance in building plans

A coporations board of directors

Sets major corporate goals and policies

The business ownership that has the most difficulty in raising capital is

Sole propietorship

Tonya Thomas is tired of working for other people. She wants to start her own administrative services businesses and control her own work schedule. She wants to have sole responsibility for all business decisions. Thomas should form a(n):

Sole propietorship

Which type of business organization experinces the least government regulation

Sole propietorships

When Addison Wilcox buys an H&R Block franchise, he becomes a franchisee.

True

A term that means that business damages and/or debts can also be attached to the personal assets of the owners is ____ liability

Unlimited

Which of the following is an example of a disadvantage associated with a partnership

Unlimited liability

Bob Nichol and Martha Bohner own and operate a small company that bakes and sells Thunder Muffins, gigantic muffins full of blueberries, blackberries, or raspberries. They sell the muffins at a local farm that is open to the public on weekends. Since they operate the business as a partnership, they should:

Agree to share the business profits and losses

Which of the following describes a disadvantage assoiciated with a corporation

All of the above

Which of the followinf is a disadvantage of sole propietor ownership

Difficulty in raising capitol

The purchaser of a franchise is called the

Franchisee

The headquaters, seller, supplier of the service or method of operation of a franchise is called the

Franchisor

Paul Hyatt owns and operates DeepClean, a Florida-based company that cleans up mold and mildew in homes and businesses. As the sole proprietor of the business, he has unlimited liability, which means:

He is fully liable for all business debts

The franchisor generally does NOT provide the franchisee with

Help in employee selection

Stewed Tomatoes was an "all-girl power-pop trio." Its three members realized that many musicians feel stifled when making music in a sterile studio environment while the clock ticked away expensive hours, so the three girl band members created Materville Studios, a multimedia production house and recording studio in downtown Chicago. They share work responsibilities and profits equally. Materville Studios is a(n):

Parntership

Coporations face many more government restrictions and regulations than sole propietorships and partnerships

True

The coporations board of directors elects the corporate officers

True

Who owns a coporation

everyone who owns a share of stock int he corporation

Sole propietorships

have unlimited liability

A corporation

does not have a size limition

An S corporation

does not make the owners of the corporation personally liable for its debts

Double taxation in a corportation means

earning of the corporation and dividends of the shareholders both are taxed