Question 1

Because of limited liability, individuals are more willing to invest in corporations than in other forms of business.

Accepted Answer

A) True 
 B)False

Question 2

When many banks join together to lend money to developing countries such as Bangladesh and Malaysia, they seek to spread out the risk of default. This is called

Accepted Answer

A)  a not-for-profit organization.
B)  a cooperative.
C)  diversification.
D)  a quasi-government corporation.
E)  a syndicate.F) None of the above
G) A) and D)

Question 3

A ____ invests money in the business but has no management responsibility.

Accepted Answer

A)  general partner
B)  limited partner
C)  sole proprietor
D)  nominal partner
E)  stockbrokerF) A) and B)
G) A) and C)

Question 4

As a limited partner in a construction business, Joe

Accepted Answer

A)  has input only on major company decisions.
B)  contributes only his time and not his money.
C)  does not receive any portion of the profits.
D)  only risks his initial investment.
E)  cannot lose his investment in the partnership.F) All of the above
G) A) and D) D

Question 5

Kerry wants to start a business to sell handmade jewelry. She is very competent at making the jewelry and teaching others to make it, and she has saved a reasonable amount of money to start the business. Who of the following would make the best partner for Kerry?

Accepted Answer

A)  Bailey, an artist with a real flair for new-age jewelry design
B)  Ashley, Kerry's best friend who is fun to hang out with and good at solving problems
C)  Natalie, who has business experience with accounting, management, and marketing
D)  Janette, who used to work at the jewelry counter at a department store
E)  Darla, an engineer with industrial management experience but no moneyF) A) and E)
G) A) and B) C

Question 6

What types of information should a partnership agreement contain?

Accepted Answer

A partnership agreement should generally...

Question 7

Most partnerships have ____ partners.

Accepted Answer

A)  two
B)  three
C)  four
D)  five
E)  more than fiveF) C) and D)
G) A) and B)

Question 8

In the state in which it is incorporated, a business is known as a(n)

Accepted Answer

A)  S-corporation.
B)  resident corporation.
C)  public corporation.
D)  foreign corporation.
E)  domestic corporation.F) C) and E)
G) A) and D)

Question 9

B&G, Inc.
A year ago, Kevin went to work for B&G, Inc. He has worked for the finance department ever since he started. He noticed that the corporation was only taxed as though it were a partnership. This was something that he found very odd when he first started working for the company, but he later realized it was a fairly common practic
While the job was challenging, Kevin was not happy. He wanted to work for a company whose main goal was to provide service to the community, not to make a profit. However, Kevin felt that, considering his present financial situation, he had to continue working for B&G, Inc. A week later, Kevin discovered there was going to be a merger between B&G, Inc. and one of its major competitors. Kevin's boss informed him that he would be getting a promotion and a rais
-Refer to B&G, Inc. B&G, Inc. was going through a ____ merger.

Accepted Answer

A)  vertical
B)  horizontal
C)  conglomerate
D)  hostile
E)  leveragedF) D) and E)
G) A) and D)

Question 10

All of the following are advantages of the partnership form of organization except

Accepted Answer

A)  unlimited liability.
B)  retention of profits.
C)  combined skills and knowledge.
D)  better access to capital and credit.
E)  ease of start-up.F) A) and B)
G) All of the above

Question 11

Surplus funds of a not-for-profit organization are distributed to members of the board of directors.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is an example of a horizontal merger?

Accepted Answer

A)  The purchase of a catering firm by Delta Airlines
B)  The purchase of Marathon Oil Company by U.S.Steel
C)  The purchase of Kentucky Fried Chicken by PepsiCo
D)  The purchase of Sam's Meat Packing Company by the Kroger supermarket chain
E)  The purchase of Mobil Oil by ExxonF) A) and B)
G) A) and C) E

Question 13

Mike Nettles approached Nathan Lang about becoming a partner in a firm that destroys environmental waste. While Mike would like to become a partner in the firm, he is concerned about his liability because he has recently inherited a lot of money. In this situation, Mike should become a

Accepted Answer

A)  general partner with a majority ownership interest in the business.
B)  general partner with a minority ownership interest in the business.
C)  limited partner.
D)  joint venturist.
E)  sole proprietor.F) D) and E)
G) C) and E)

Question 14

Which of the following is an advantage of a sole proprietorship?

Accepted Answer

A)  The owner has unlimited liability.
B)  The business ceases to exist when the owner dies.
C)  There is a limit to the amount one person can borrow.
D)  Profits are taxed as individual income.
E)  The owner enjoys lack of continuity.F) A) and C)
G) C) and E)

Question 15

Mark owns stock in Walgreens. He has the right to vote on company issues and examine corporate records, and he receives dividends from Walgreens' profits. What type of stock does Mark own?

Accepted Answer

A)  Common
B)  "A" class
C)  Proxy
D)  Dividend
E)  PreferredF) A) and E)
G) All of the above

Question 16

Describe the ownership, operation, and size of a sole proprietorship.

Accepted Answer

A sole proprietorship is owned by one pe...

Question 17

Corporate officers are elected by the stockholders.

Accepted Answer

A) True 
 B)False

Question 18

A distribution of earnings to the stockholders of a corporation is a(n)

Accepted Answer

A)  par distribution.
B)  dividend.
C)  earnings per share.
D)  distributed payment.
E)  common payment.F) B) and D)
G) A) and B)

Question 19

Local residents have always thought the mom-and-pop store on the corner of Locust and Congress was a partnership between Mr. and Mrs. Jones. But Mr. Jones is the real owner. This probably means that the store is a

Accepted Answer

A)  limited partnership.
B)  sole proprietorship.
C)  corporation.
D)  cooperative.
E)  joint venture.F) A) and B)
G) C) and E)

Question 20

Describe the merger trends affecting American business.

Accepted Answer

Most experts predict that mergers and ac...

Exam 4: Choosing a Form of Business Ownership

Because of limited liability, individuals are more willing to invest in corporations than in other forms of business.

Correct Answer
verified

When many banks join together to lend money to developing countries such as Bangladesh and Malaysia, they seek to spread out the risk of default. This is called

Correct Answer
verified

A ____ invests money in the business but has no management responsibility.

Correct Answer
verified

As a limited partner in a construction business, Joe

Correct Answer
verified
D

Kerry wants to start a business to sell handmade jewelry. She is very competent at making the jewelry and teaching others to make it, and she has saved a reasonable amount of money to start the business. Who of the following would make the best partner for Kerry?

Correct Answer
verified
C

What types of information should a partnership agreement contain?

Correct Answer
verified
A partnership agreement should generally...
View Answer

Most partnerships have ____ partners.

Correct Answer
verified

In the state in which it is incorporated, a business is known as a(n)

Correct Answer
verified

Correct Answer
verified

All of the following are advantages of the partnership form of organization except

Correct Answer
verified

Surplus funds of a not-for-profit organization are distributed to members of the board of directors.

Correct Answer
verified

Which of the following is an example of a horizontal merger?

Correct Answer
verified
E

Mike Nettles approached Nathan Lang about becoming a partner in a firm that destroys environmental waste. While Mike would like to become a partner in the firm, he is concerned about his liability because he has recently inherited a lot of money. In this situation, Mike should become a

Correct Answer
verified

Which of the following is an advantage of a sole proprietorship?

Correct Answer
verified

Mark owns stock in Walgreens. He has the right to vote on company issues and examine corporate records, and he receives dividends from Walgreens' profits. What type of stock does Mark own?

Correct Answer
verified

Describe the ownership, operation, and size of a sole proprietorship.

Correct Answer
verified
A sole proprietorship is owned by one pe...
View Answer

Corporate officers are elected by the stockholders.

Correct Answer
verified

A distribution of earnings to the stockholders of a corporation is a(n)

Correct Answer
verified

Local residents have always thought the mom-and-pop store on the corner of Locust and Congress was a partnership between Mr. and Mrs. Jones. But Mr. Jones is the real owner. This probably means that the store is a

Correct Answer
verified

Describe the merger trends affecting American business.

Correct Answer
verified
Most experts predict that mergers and ac...
View Answer

Exam 4: Choosing a Form of Business Ownership

Because of limited liability, individuals are more willing to invest in corporations than in other forms of business.

Correct AnswerverifiedShow Answer

When many banks join together to lend money to developing countries such as Bangladesh and Malaysia, they seek to spread out the risk of default. This is called

Correct AnswerverifiedShow Answer

A ____ invests money in the business but has no management responsibility.

Correct AnswerverifiedShow Answer

As a limited partner in a construction business, Joe

Correct AnswerverifiedD

Kerry wants to start a business to sell handmade jewelry. She is very competent at making the jewelry and teaching others to make it, and she has saved a reasonable amount of money to start the business. Who of the following would make the best partner for Kerry?

Correct AnswerverifiedC

What types of information should a partnership agreement contain?

Correct AnswerverifiedA partnership agreement should generally...View AnswerShow Answer

Most partnerships have ____ partners.

Correct AnswerverifiedShow Answer

In the state in which it is incorporated, a business is known as a(n)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All of the following are advantages of the partnership form of organization except

Correct AnswerverifiedShow Answer

Surplus funds of a not-for-profit organization are distributed to members of the board of directors.

Correct AnswerverifiedShow Answer

Which of the following is an example of a horizontal merger?

Correct AnswerverifiedE

Mike Nettles approached Nathan Lang about becoming a partner in a firm that destroys environmental waste. While Mike would like to become a partner in the firm, he is concerned about his liability because he has recently inherited a lot of money. In this situation, Mike should become a

Correct AnswerverifiedShow Answer

Which of the following is an advantage of a sole proprietorship?

Correct AnswerverifiedShow Answer

Mark owns stock in Walgreens. He has the right to vote on company issues and examine corporate records, and he receives dividends from Walgreens' profits. What type of stock does Mark own?

Correct AnswerverifiedShow Answer

Describe the ownership, operation, and size of a sole proprietorship.

Correct AnswerverifiedA sole proprietorship is owned by one pe...View AnswerShow Answer

Corporate officers are elected by the stockholders.

Correct AnswerverifiedShow Answer

A distribution of earnings to the stockholders of a corporation is a(n)

Correct AnswerverifiedShow Answer

Local residents have always thought the mom-and-pop store on the corner of Locust and Congress was a partnership between Mr. and Mrs. Jones. But Mr. Jones is the real owner. This probably means that the store is a

Correct AnswerverifiedShow Answer

Describe the merger trends affecting American business.

Correct AnswerverifiedMost experts predict that mergers and ac...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified
C

Correct Answer
verified
A partnership agreement should generally...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
E

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A sole proprietorship is owned by one pe...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Most experts predict that mergers and ac...
View Answer