Question 1

A disadvantage of corporations is that they generally require extensive paperwork.

Accepted Answer

A) True 
 B)False

Question 2

Nick is investing $25,000 in a partnership with his sister and brother. Nick does not want to be an active part of the partnership and can only afford to risk the $25,000 he is investing. His brother and sister agree to let him share a proportionate amount of the profits. Nick is a ________ in this partnership.

Accepted Answer

A)  limited partner
B)  junior partner
C)  general partner
D)  sole partnerE) B) and C)
F) B) and D)

Question 3

Which of the following statements BEST describes the distinction between a not-for-profit corporation and a for-profit corporation?

Accepted Answer

A)  Not-for-profits do not pay their employees.
B)  Not-for-profits cannot be organized for any person's private gain.
C)  Not-for-profits have to dissolve when the owner leaves or dies.
D)  Not-for-profits cannot hire executive officers to run the business.E) None of the above
F) B) and C)

Question 4

Policies regarding all of the following points should be included in a partnership agreement EXCEPT ________.

Accepted Answer

A)  division of stock
B)  capital contribution
C)  shares of profits or losses
D)  decision-making processE) B) and C)
F) A) and B)

Question 5

Kris and Amy own a workout facility in which they are co-owners. Both take an active role in the management of the business and each accepts unlimited liability. Kris and Amy operate as a ________.

Accepted Answer

A)  joint venture
B)  general partnership
C)  limited partnership
D)  cooperativeE) A) and C)
F) B) and C)

Question 6

The following are characteristics shared by both for-profit and not-for-profit corporations EXCEPT ________.

Accepted Answer

A)  electing a board of directors to run the organization
B)  offering employee fringe benefits
C)  having limited liability protection
D)  issuing shares of stockE) A) and B)
F) B) and C)

Question 7

All of the following are reasons business owners consider using a corporation structure of ownership EXCEPT ________.

Accepted Answer

A)  the appearance of stability and legitimacy
B)  protection from significant loss of personal assets
C)  ease of forming and setting up the structure
D)  eased ability of raising capitalE) A) and D)
F) A) and C)

Question 8

When establishing a sole proprietorship, it may be necessary to obtain local licensing or permits.

Accepted Answer

A) True 
 B)False

Exam 6: Forms of Business Ownership

Correct Answer
verified

Which of the following statements BEST describes the distinction between a not-for-profit corporation and a for-profit corporation?

Correct Answer
verified

A disadvantage of corporations is that they generally require extensive paperwork.

Correct Answer
verified

The following are characteristics shared by both for-profit and not-for-profit corporations EXCEPT ________.

Correct Answer
verified

Policies regarding all of the following points should be included in a partnership agreement EXCEPT ________.

Correct Answer
verified

When establishing a sole proprietorship, it may be necessary to obtain local licensing or permits.

Correct Answer
verified

Kris and Amy own a workout facility in which they are co-owners. Both take an active role in the management of the business and each accepts unlimited liability. Kris and Amy operate as a ________.

Correct Answer
verified

All of the following are reasons business owners consider using a corporation structure of ownership EXCEPT ________.

Correct Answer
verified

Exam 6: Forms of Business Ownership

Correct AnswerverifiedShow Answer

Which of the following statements BEST describes the distinction between a not-for-profit corporation and a for-profit corporation?

Correct AnswerverifiedShow Answer

A disadvantage of corporations is that they generally require extensive paperwork.

Correct AnswerverifiedShow Answer

The following are characteristics shared by both for-profit and not-for-profit corporations EXCEPT ________.

Correct AnswerverifiedShow Answer

Policies regarding all of the following points should be included in a partnership agreement EXCEPT ________.

Correct AnswerverifiedShow Answer

When establishing a sole proprietorship, it may be necessary to obtain local licensing or permits.

Correct AnswerverifiedShow Answer

Kris and Amy own a workout facility in which they are co-owners. Both take an active role in the management of the business and each accepts unlimited liability. Kris and Amy operate as a ________.

Correct AnswerverifiedShow Answer

All of the following are reasons business owners consider using a corporation structure of ownership EXCEPT ________.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified