Question 1

Which of the following is true of the distribution of profits earned by a partnership?

Accepted Answer

A)  They are distributed equally irrespective of the capital provided by each partner.
B)  They are distributed based on the work each partner puts into the business.
C)  They are distributed based on the credit rating of each partner.
D)  They are distributed in the proportions specified in the articles of partnership.
E)  They are distributed as per the guidelines in articles of incorporation.F) A) and E)
G) A) and B)

Question 2

Which type of stockholders usually has the right to vote and elect the board of directors?

Accepted Answer

A)  A preferred stockholder
B)  A common stockholder
C)  A capital stockholder
D)  A perpetual stockholder
E)  A proxy stockholderF) A) and B)
G) A) and C)

Question 3

_____ are profits of a corporation that are distributed in the form of cash payments to stockholders.

Accepted Answer

A)  Common stocks
B)  Bonds
C)  Retained earnings
D)  Dividends
E)  Preferred stocksF) A) and B)
G) C) and D)

Question 4

Organizations such as the National Aeronautics and Space Administration and the U.S.Postal Service that are owned by the federal,state,or local governments are known as _____.

Accepted Answer

A)  S corporations
B)  sole proprietorships
C)  private corporations
D)  quasi-public corporations
E)  limited liability companiesF) A) and B)
G) A) and C)

Question 5

An organization composed of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization is known as a(n) _____.

Accepted Answer

A)  cooperative
B)  S corporation
C)  sole proprietorship
D)  multinational firm
E)  general partnershipF) A) and B)
G) B) and E)

Question 6

Which of the following statements is true of private corporations?

Accepted Answer

A)  Their stock can be bought or sold by anyone.
B)  They do not pay taxes on their income.
C)  Their workforce usually consists of fewer than 50 employees.
D)  They are owned and managed by just one or a few people.
E)  They are required to disclose financial information publicly.F) A) and D)
G) B) and E)

Question 7

Maria wants to start a new business in collaboration with her husband and brother-in-law.The features she is looking for in the business are as follows: least possible regulatory controls,faster decision making,and ease of organization.She also wants a business in which she will not be forced to pay off any business debts from her personal assets.Which type of business ownership will be best suited to her needs?

Accepted Answer

A)  General partnership
B)  S corporation
C)  Sole proprietorship
D)  Limited partnership
E)  C corporationF) A) and B)
G) A) and C)

Question 8

Assure Pharma Corp.,a private corporation,sold its stock to raise the money it required for global expansion.As a result,anyone could buy,sell,or trade the stocks of the company.The process adopted by Assure Pharma Corp.to raise money is referred to as _____.

Accepted Answer

A)  factoring
B)  bartering
C)  franchising
D)  initial public offering
E)  angel investmentF) B) and D)
G) None of the above

Question 9

Which of the following forms of business ownership requires owners to perform many functions and possess diverse skills to make decisions?

Accepted Answer

A)  An S corporation
B)  A C corporation
C)  A joint venture
D)  A cooperative
E)  A sole proprietorshipF) C) and D)
G) B) and C)

Question 10

In a sole proprietorship,the owner has complete control over the business.This allows the owner to:

Accepted Answer

A)  have limited liability in meeting the debts of the business.
B)  have access to multiple sources of funds.
C)  respond quickly to competitive business conditions or to changes in the economy.
D)  match the wages and benefits offered to employees by a large competing corporation.
E)  utilize all profits without paying any taxes.F) B) and E)
G) A) and C)

Question 11

Salma owns a pharmacy near a hospital.She started the business with a personal loan and is wholly responsible for repaying it.Salma also needs to pay personal income tax on the profits generated from the business.Her business is an example of a(n) :

Accepted Answer

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

Question 12

A(n) _____ is a form of business ownership that is difficult to form and operate and it also restricts the number and types of shareholders.

Accepted Answer

A)  worker cooperative
B)  S corporation
C)  C corporation
D)  consumer cooperative
E)  general partnershipF) A) and E)
G) D) and E)

Question 13

Which of the following statements is true of preferred stockholders?

Accepted Answer

A)  They are eligible to vote by proxy.
B)  They are the voting owners of a corporation.
C)  They have the right to exercise preemptive rights.
D)  They have a claim to profits before other stockholders do.
E)  They are generally the decision-makers in the day-to-day running of an organization.F) A) and B)
G) A) and C)

Question 14

Limited partners have no voice in the management of the partnership.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is true of joint ventures?

Accepted Answer

A)  They enjoy reduced government regulations when compared to general partnerships.
B)  They are mostly formed to last forever.
C)  They are set up not to make profits but to provide service to the community.
D)  They are popular in situations that call for large investments.
E)  They restrict the number and types of shareholders in the organization.F) None of the above
G) C) and E)

Exam 4: Options for Organizing Business

A(n) _____ is a form of business ownership that is difficult to form and operate and it also restricts the number and types of shareholders.

Correct Answer
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In a sole proprietorship,the owner has complete control over the business.This allows the owner to:

Correct Answer
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Which of the following statements is true of joint ventures?

Correct Answer
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Which of the following statements is true of private corporations?

Correct Answer
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Correct Answer
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Salma owns a pharmacy near a hospital.She started the business with a personal loan and is wholly responsible for repaying it.Salma also needs to pay personal income tax on the profits generated from the business.Her business is an example of a(n) :

Correct Answer
verified

_____ are profits of a corporation that are distributed in the form of cash payments to stockholders.

Correct Answer
verified

Assure Pharma Corp.,a private corporation,sold its stock to raise the money it required for global expansion.As a result,anyone could buy,sell,or trade the stocks of the company.The process adopted by Assure Pharma Corp.to raise money is referred to as _____.

Correct Answer
verified

Which of the following forms of business ownership requires owners to perform many functions and possess diverse skills to make decisions?

Correct Answer
verified

Which type of stockholders usually has the right to vote and elect the board of directors?

Correct Answer
verified

Which of the following statements is true of preferred stockholders?

Correct Answer
verified

An organization composed of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization is known as a(n) _____.

Correct Answer
verified

Which of the following is true of the distribution of profits earned by a partnership?

Correct Answer
verified

Limited partners have no voice in the management of the partnership.

Correct Answer
verified

Organizations such as the National Aeronautics and Space Administration and the U.S.Postal Service that are owned by the federal,state,or local governments are known as _____.

Correct Answer
verified

Exam 4: Options for Organizing Business

A(n) _____ is a form of business ownership that is difficult to form and operate and it also restricts the number and types of shareholders.

Correct AnswerverifiedShow Answer

In a sole proprietorship,the owner has complete control over the business.This allows the owner to:

Correct AnswerverifiedShow Answer

Which of the following statements is true of joint ventures?

Correct AnswerverifiedShow Answer

Which of the following statements is true of private corporations?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Salma owns a pharmacy near a hospital.She started the business with a personal loan and is wholly responsible for repaying it.Salma also needs to pay personal income tax on the profits generated from the business.Her business is an example of a(n) :

Correct AnswerverifiedShow Answer

_____ are profits of a corporation that are distributed in the form of cash payments to stockholders.

Correct AnswerverifiedShow Answer

Assure Pharma Corp.,a private corporation,sold its stock to raise the money it required for global expansion.As a result,anyone could buy,sell,or trade the stocks of the company.The process adopted by Assure Pharma Corp.to raise money is referred to as _____.

Correct AnswerverifiedShow Answer

Which of the following forms of business ownership requires owners to perform many functions and possess diverse skills to make decisions?

Correct AnswerverifiedShow Answer

Which type of stockholders usually has the right to vote and elect the board of directors?

Correct AnswerverifiedShow Answer

Which of the following statements is true of preferred stockholders?

Correct AnswerverifiedShow Answer

An organization composed of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization is known as a(n) _____.

Correct AnswerverifiedShow Answer

Which of the following is true of the distribution of profits earned by a partnership?

Correct AnswerverifiedShow Answer

Limited partners have no voice in the management of the partnership.

Correct AnswerverifiedShow Answer

Organizations such as the National Aeronautics and Space Administration and the U.S.Postal Service that are owned by the federal,state,or local governments are known as _____.

Correct AnswerverifiedShow Answer

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