Question 1

A business owned and operated by one person is called a(n) :

Accepted Answer

A)   identical commerce.
B)   sole proprietorship.
C)   corporation aggregate.
D)   501(c)  corporation.E) A) and C)
F) A) and B)

Question 2

A limited partner will be deemed by the courts to be a general partner if he or she:

Accepted Answer

A)   constantly refuses to sign a proxy.
B)   participates regularly in the duty of loyalty and duty of care.
C)   participates in the overall management of the business.
D)   unintentionally violates the duty of care owed to the corporation.E) B) and C)
F) A) and B)

Question 3

An advantage to a sole proprietorship is that the owner has complete authority,within the boundaries of the law,for the running of the business.

Accepted Answer

A) True 
 B)False

Question 4

The major disadvantage of a corporation is the fact that the corporation is required to pay separate income taxes at a special corporate rate for any year during which a profit is earned.

Accepted Answer

A) True 
 B)False

Question 5

As is true for all small firms,the owners of a Limited Liability Company frequently have difficulty in raising:

Accepted Answer

A)   additional funds.
B)   profits.
C)   insurance.
D)   joint ventures.E) A) and B)
F) A) and C)

Question 6

The death or disability of one of the partners in a business causes:

Accepted Answer

A)   affirmation.
B)   discharge.
C)   investiture.
D)   dissolution.E) A) and C)
F) B) and C)

Question 7

The duty of care means that a director has a legal and ethical obligation to act diligently and prudently in conducting the affairs of the corporation.

Accepted Answer

A) True 
 B)False

Question 8

All but one of the following organizational forms has limited liability.This exception is the:

Accepted Answer

A)   sole proprietorship.
B)   subchapter C corporation.
C)   subchapter S corporation.
D)   limited partnership.E) B) and C)
F) A) and D)

Question 9

In a sole proprietorship,the entrepreneur has to obtain a general ____________from his or her local municipality.

Accepted Answer

A)   fiscal access
B)   stock reserve
C)   business license
D)   corporate authorityE) B) and D)
F) A) and B)

Question 10

Organizational forms that are referred to as not-for-profits may include:

Accepted Answer

A)   limited liability corporations.
B)   charitable organizations.
C)   business organizations.
D)   industrial corporations.E) A) and B)
F) B) and C)

Question 11

In a business,there may be times when partners disagree on how the business should be run.This serves as a(n) :

Accepted Answer

A)   lead.
B)   stepping-stone.
C)   disadvantage.
D)   advantage.E) All of the above
F) B) and C)

Question 12

In a business,each partner has a right to share in the value of the firm's:

Accepted Answer

A)   reputation.
B)   assets.
C)   policy.
D)   practice.E) A) and B)
F) All of the above

Question 13

The expense associated with forming and maintaining the company in a corporation serves as a(n) :

Accepted Answer

A)   stepping-stone.
B)   disadvantage.
C)   accounting strategy.
D)   advantage.E) C) and D)
F) A) and B)

Question 14

The document that lists the general powers of a corporation is called the:

Accepted Answer

A)   memorandum of hierarchy.
B)   memorandum of association.
C)   articles of entrepreneurship.
D)   articles of incorporation.E) None of the above
F) B) and C)

Question 15

Many people in the United States have an entrepreneurial spirit that encourages them to pursue the "American Dream" of:

Accepted Answer

A)   traveling throughout the world.
B)   having employment security.
C)   having a leisurely life.
D)   owning and operating their own business.E) A) and D)
F) None of the above

Question 16

Organizations that are referred to as not-for-profits and can include charitable organizations but not organizations such as universities,political parties,labor union,social clubs,and others.

Accepted Answer

A) True 
 B)False

Question 17

At times,individuals can become partners for only a short period of time,or for only a single project.This activity is defined as a(n) :

Accepted Answer

A)   joint venture.
B)   severability.
C)   sole liability.
D)   union charge.E) B) and D)
F) None of the above

Question 18

In a corporation,directors and officers of the company in which they hold their positions have a _____________ towards the company.

Accepted Answer

A)   dependability
B)   mandatory duty
C)   time bound duty
D)   fiduciary responsibilityE) A) and B)
F) A) and C)

Question 19

Corporations are owned by shareholders,who purchase shares of stock in the corporation.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following organizational forms has in place a management team whose members share in the overall control of the business?

Accepted Answer

A)   Charity organizations.
B)   Sole proprietorship.
C)   religious organizations.
D)   Limited Liability Company.E) B) and C)
F) A) and B)

Exam 20: Business Organizations

The major disadvantage of a corporation is the fact that the corporation is required to pay separate income taxes at a special corporate rate for any year during which a profit is earned.

Correct AnswerverifiedShow Answer

Many people in the United States have an entrepreneurial spirit that encourages them to pursue the "American Dream" of:

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Organizations that are referred to as not-for-profits and can include charitable organizations but not organizations such as universities,political parties,labor union,social clubs,and others.

Correct AnswerverifiedShow Answer

Organizational forms that are referred to as not-for-profits may include:

Correct AnswerverifiedShow Answer

At times,individuals can become partners for only a short period of time,or for only a single project.This activity is defined as a(n) :

Correct AnswerverifiedShow Answer

A limited partner will be deemed by the courts to be a general partner if he or she:

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All but one of the following organizational forms has limited liability.This exception is the:

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A business owned and operated by one person is called a(n) :

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The death or disability of one of the partners in a business causes:

Correct AnswerverifiedShow Answer

In a business,each partner has a right to share in the value of the firm's:

Correct AnswerverifiedShow Answer

In a sole proprietorship,the entrepreneur has to obtain a general ____________from his or her local municipality.

Correct AnswerverifiedShow Answer

An advantage to a sole proprietorship is that the owner has complete authority,within the boundaries of the law,for the running of the business.

Correct AnswerverifiedShow Answer

Which of the following organizational forms has in place a management team whose members share in the overall control of the business?

Correct AnswerverifiedShow Answer

As is true for all small firms,the owners of a Limited Liability Company frequently have difficulty in raising:

Correct AnswerverifiedShow Answer

In a business,there may be times when partners disagree on how the business should be run.This serves as a(n) :

Correct AnswerverifiedShow Answer

The duty of care means that a director has a legal and ethical obligation to act diligently and prudently in conducting the affairs of the corporation.

Correct AnswerverifiedShow Answer

The document that lists the general powers of a corporation is called the:

Correct AnswerverifiedShow Answer

The expense associated with forming and maintaining the company in a corporation serves as a(n) :

Correct AnswerverifiedShow Answer

In a corporation,directors and officers of the company in which they hold their positions have a _____________ towards the company.

Correct AnswerverifiedShow Answer

Corporations are owned by shareholders,who purchase shares of stock in the corporation.

Correct AnswerverifiedShow Answer

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