Question 1

When one of the owners of a corporation dies,the corporation legally ceases to exist.

Accepted Answer

A) True 
 B)False

Question 2

An alien corporation does business abroad but is chartered in the U.S.

Accepted Answer

A) True 
 B)False

Question 3

Franchised businesses are successful both domestically and internationally) because:

Accepted Answer

A)  They require very little start-up revenue.
B)  People prefer the owners and employees of franchised businesses.
C)  Laws require franchisors to provide the same level of service to franchisees.
D)  Customers like the predictability of the product and/or service.E) A) and B)
F) A) and C)

Question 4

When two firms who do not participate in the same industries,for example a software company and a fast food restaurant company decide to merge,the result is called a ____________ merger.

Accepted Answer

A)  vertical
B)  horizontal
C)  linear
D)  conglomerateE) B) and C)
F) None of the above

Question 5

Midas Muffler sells franchises to prospective businesspersons who want to use the Midas name and offer Midas products.In a franchise arrangement,Midas would be the __________,and the buyer of the franchise is the __________.

Accepted Answer

A)  owner;limited partner
B)  co-signer;co-signee
C)  franchisor;franchisee
D)  franchisee;franchisorE) None of the above
F) All of the above

Question 6

If a partner in a limited partnership dies,the partnership ceases to exist.

Accepted Answer

A) True 
 B)False

Question 7

A franchise may be organized as a sole proprietorship,partnership,or corporation.

Accepted Answer

A) True 
 B)False

Question 8

One method to avoid conflicts between partners is to solicit the services of a lawyer to create a well-written partnership agreement.

Accepted Answer

A) True 
 B)False

Question 9

The form of business ownership best suited to raising large amounts of money for expansion is the:

Accepted Answer

A)  Sole proprietorship.
B)  Partnership.
C)  Corporation.
D)  Cooperative.E) None of the above
F) C) and D)

Question 10

Maya plans to open a shop specializing in foods and cultural items from the Middle East.She wants to be the firm's only general partner,but she is trying to get several friends to participate as limited partners.Apparently Maya wants to:

Accepted Answer

A)  Limit her personal liability to the amount she personally invests in the company.
B)  Keep all of the firm's profits.
C)  Obtain a strong financial base for the firm while maintaining personal control over the firm's management.
D)  Meet the legal requirements of the Uniform Partnership Act.E) B) and D)
F) B) and C)

Question 11

One disadvantage of a limited liability company is that it:

Accepted Answer

A)  Requires all earnings of the business be taxed at the corporate rate.
B)  Has a limited life span.
C)  Requires the owners to divide up profits and losses in a fixed proportion.
D)  Has a more restrictive ownership requirement than S corporations.E) None of the above
F) A) and C)

Question 12

The corporation is the most common form of business ownership.

Accepted Answer

A) True 
 B)False

Question 13

Corporations are easy to start and easy to terminate.

Accepted Answer

A) True 
 B)False

Question 14

Mojo Motors is a small conventional corporation with only 212 stockholders.Eleven of the stockholders are citizens of Mexico,and eight others are citizens of Canad
A.Due to its size and diversity in ownership,you would recommend that Mojo Motors change to an S-Corporation.

Accepted Answer

A) True 
 B)False

Question 15

Adam is a major stockholder in Precision Transmission Services PTS) ,a nationwide network of transmission repair shops founded by his father.Currently,PTS stock is sold on the open market,but Adam has talked to several relatives about his desire to get all of the PTS stock back in his family's hands.Adam is interested in _______________________________.

Accepted Answer

A)  taking the firm private
B)  a hostile takeover of the firm
C)  converting the firm to a general partnership
D)  forming a master limited partnershipE) A) and B)
F) A) and C)

Question 16

According to the Uniform Partnership Act,the three key elements of any general partnership are:

Accepted Answer

A)  A board of directors,a written partnership agreement,and a well-defined product or service.
B)  Two owners,an adequate financial base,and a written statement describing the manner in which profits and losses will be divided.
C)  Common ownership,shared profits and losses,and right to participate in management.
D)  Common stock,a board of directors,and a statement of limited liability.E) A) and B)
F) A) and C)

Question 17

Although franchise arrangements are a good source of income for the franchisee,these businesses do not contribute significantly toward job creation.

Accepted Answer

A) True 
 B)False

Question 18

The S corporation form of business would be particularly attractive to fast growing companies that want to attract thousands of new stockholders.

Accepted Answer

A) True 
 B)False

Question 19

A drawback of sole proprietorships is that they usually have limited access to additional financial resources.

Accepted Answer

A) True 
 B)False

Question 20

Earnings of C conventional) corporations can be:

Accepted Answer

A)  Taxed twice if they are distributed as dividends to stockholders.
B)  Taxed at twice the going rate of a partnership or sole proprietorship.
C)  Taxed by the federal government,but they are exempt from state taxes if the corporation owns any facilities within that state.
D)  Taxed the same as a partnership.E) C) and D)
F) All of the above

Exam 5: How to Form a Business

When two firms who do not participate in the same industries,for example a software company and a fast food restaurant company decide to merge,the result is called a ____________ merger.

Correct Answer
verified

The form of business ownership best suited to raising large amounts of money for expansion is the:

Correct Answer
verified

A drawback of sole proprietorships is that they usually have limited access to additional financial resources.

Correct Answer
verified

One method to avoid conflicts between partners is to solicit the services of a lawyer to create a well-written partnership agreement.

Correct Answer
verified

Correct Answer
verified

According to the Uniform Partnership Act,the three key elements of any general partnership are:

Correct Answer
verified

A franchise may be organized as a sole proprietorship,partnership,or corporation.

Correct Answer
verified

One disadvantage of a limited liability company is that it:

Correct Answer
verified

If a partner in a limited partnership dies,the partnership ceases to exist.

Correct Answer
verified

Mojo Motors is a small conventional corporation with only 212 stockholders.Eleven of the stockholders are citizens of Mexico,and eight others are citizens of Canad A.Due to its size and diversity in ownership,you would recommend that Mojo Motors change to an S-Corporation.

Correct Answer
verified

An alien corporation does business abroad but is chartered in the U.S.

Correct Answer
verified

The S corporation form of business would be particularly attractive to fast growing companies that want to attract thousands of new stockholders.

Correct Answer
verified

Corporations are easy to start and easy to terminate.

Correct Answer
verified

Maya plans to open a shop specializing in foods and cultural items from the Middle East.She wants to be the firm's only general partner,but she is trying to get several friends to participate as limited partners.Apparently Maya wants to:

Correct Answer
verified

Franchised businesses are successful both domestically and internationally) because:

Correct Answer
verified

The corporation is the most common form of business ownership.

Correct Answer
verified

When one of the owners of a corporation dies,the corporation legally ceases to exist.

Correct Answer
verified

Midas Muffler sells franchises to prospective businesspersons who want to use the Midas name and offer Midas products.In a franchise arrangement,Midas would be the ,and the buyer of the franchise is the .

Correct Answer
verified

Although franchise arrangements are a good source of income for the franchisee,these businesses do not contribute significantly toward job creation.

Correct Answer
verified

Earnings of C conventional) corporations can be:

Correct Answer
verified

Exam 5: How to Form a Business

When two firms who do not participate in the same industries,for example a software company and a fast food restaurant company decide to merge,the result is called a ____________ merger.

Correct AnswerverifiedShow Answer

The form of business ownership best suited to raising large amounts of money for expansion is the:

Correct AnswerverifiedShow Answer

A drawback of sole proprietorships is that they usually have limited access to additional financial resources.

Correct AnswerverifiedShow Answer

One method to avoid conflicts between partners is to solicit the services of a lawyer to create a well-written partnership agreement.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

According to the Uniform Partnership Act,the three key elements of any general partnership are:

Correct AnswerverifiedShow Answer

A franchise may be organized as a sole proprietorship,partnership,or corporation.

Correct AnswerverifiedShow Answer

One disadvantage of a limited liability company is that it:

Correct AnswerverifiedShow Answer

If a partner in a limited partnership dies,the partnership ceases to exist.

Correct AnswerverifiedShow Answer

Mojo Motors is a small conventional corporation with only 212 stockholders.Eleven of the stockholders are citizens of Mexico,and eight others are citizens of Canad A.Due to its size and diversity in ownership,you would recommend that Mojo Motors change to an S-Corporation.

Correct AnswerverifiedShow Answer

An alien corporation does business abroad but is chartered in the U.S.

Correct AnswerverifiedShow Answer

The S corporation form of business would be particularly attractive to fast growing companies that want to attract thousands of new stockholders.

Correct AnswerverifiedShow Answer

Corporations are easy to start and easy to terminate.

Correct AnswerverifiedShow Answer

Maya plans to open a shop specializing in foods and cultural items from the Middle East.She wants to be the firm's only general partner,but she is trying to get several friends to participate as limited partners.Apparently Maya wants to:

Correct AnswerverifiedShow Answer

Franchised businesses are successful both domestically and internationally) because:

Correct AnswerverifiedShow Answer

The corporation is the most common form of business ownership.

Correct AnswerverifiedShow Answer

When one of the owners of a corporation dies,the corporation legally ceases to exist.

Correct AnswerverifiedShow Answer

Midas Muffler sells franchises to prospective businesspersons who want to use the Midas name and offer Midas products.In a franchise arrangement,Midas would be the __________,and the buyer of the franchise is the __________.

Correct AnswerverifiedShow Answer

Although franchise arrangements are a good source of income for the franchisee,these businesses do not contribute significantly toward job creation.

Correct AnswerverifiedShow Answer

Earnings of C conventional) corporations can be:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Midas Muffler sells franchises to prospective businesspersons who want to use the Midas name and offer Midas products.In a franchise arrangement,Midas would be the ,and the buyer of the franchise is the .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified