Question

QUESTION 1

Manuela has worked as an accountant in her own accounting business, a sole proprietorship, for more than seven years. Among the services she offers is tax return filing and personal investment advising. Which of the following is true of Manuela’s business?

	A.	Manuela has little control over the management and operations of her business.
	B.	Manuela has unlimited liability.
	C.	Outside funding for the business has been easy for Manuela to obtain.
	D.	Manuela had varied and complicated legal requirements and paperwork to start her business.
	E.	Manuela files and pays her business taxes separately from her personal income taxes.

4.167 points   

QUESTION 2

Georgina’s new business venture, a retailer of high-end women’s footwear, is almost up and running. She has done all of her homework, constructed an elaborate business plan, and has defined a source of potential outside investment. Her biggest concern, however, is that she does not want to put herself into a position of having to sell her home or empty her personal savings accounts if her business is unable to meet its financial obligations to debtors. Which type of business should Georgina AVOID?

	A.	C corporation
	B.	LLC
	C.	sole proprietorship
	D.	cooperative
	E.	S corporation

4.167 points   

QUESTION 3

Judith and Robert have just entered into a partnership. They are going to work jointly in their new veterinary supply distributorship. Which of the following is true of their newly formed partnership?

	A.	Judith and Robert will have unlimited liability.
	B.	Judith and Robert’s business will be a separate taxable entity.
	C.	Multiple legal requirements will be required of Judith and Robert to get their business up and running.
	D.	Along with their partnership agreement, Judith and Robert will need to supply the state and federal governments with many special forms and documents.
	E.	Judith and Robert’s business will receive funding through the sale of their stock.

4.167 points   

QUESTION 4

John has recently informed his business partner, Kevin, that their new business is in dire need of capital. Which of the following should John and Kevin NOT focus on obtaining in the immediate future?

	A.	investments
	B.	supplies
	C.	profits
	D.	money
	E.	equipment

4.167 points   

QUESTION 5

Your new business has been a huge success. Because of this, you are thinking of incorporating as an S corporation. Your friend Gina, a successful businessperson herself, gives you a piece of advice to encourage you to do so. Which of the following is MOST likely to be the encouraging advice that Gina gives?

	A.	“You will not have to worry about appointing a board of directors.”
	B.	“You may be the beneficiary of a double taxation effect.”
	C.	“You will not be limited to raising capital through stock sales.”
	D.	“You will have little to no personal liability.”
	E.	“You will not have to worry about hiring an attorney, because there will be very little legal paperwork.”

4.167 points   

QUESTION 6

Last week, Javier was hired as Maximet’s new chief executive officer. Which of the following is NOT true of Javier’s new position?

	A.	Since they recently fired their chief information officer, Javier will most likely be in charge of filling that position.
	B.	Because he is chief executive officer, Javier will be excluded automatically from serving on the board of directors.
	C.	Because Javier is chief executive officer, the company’s chief operations officer will report directly to him.
	D.	As chief executive officer, Javier will report directly to the board of directors.
	E.	Because Javier is chief executive officer, the company’s chief financial officer will report directly to him.

4.167 points   

QUESTION 7

Sofia and Emmanuel recently opened their travel agency, Vacation Destinations, which employs 85 travel agents in 22 states. After carefully considering both a C corporation and an S corporation, they decided to make their new business a C corporation. Which of the following is the MOST likely reason they made this choice?

	A.	Sofia and Emmanuel wanted to avoid filing their new business’ taxes through their own personal income taxes.
	B.	Sofia and Emmanuel did not want to be personally liable for the debts of their corporation.
	C.	Sofia and Emmanuel wanted to avoid filing federal and state incorporation paperwork.
	D.	Sofia and Emmanuel did not want their new business to have a board of directors.
	E.	Sofia and Emmanuel wanted to avoid the “double taxation effect” of taxed dividend distributions.

4.167 points   

QUESTION 8

Which of the following LEAST exemplifies a limited liability corporation?

	A.	Yosemetie Yarn, a long-time regional manufacturer and distributor of exotic yarns and threads, recently was forced to dissolve when its founding member passed away.
	B.	Politico, a large national political polling specialist, recently saw the value of their stock plummet among allegations that they had not filed corporate taxes for the past three years.
	C.	Trading Partners, a newly formed business that markets and sells outdoor products to lovers of the outdoors, includes among its members/owners more than two-dozen Australians.
	D.	The owners of Maxwell’s, a mid-sized investment firm, were thankful they set up their business the way they did recently because they all kept their homes and personal savings accounts when their company failed to pay its debts.
	E.	Justin and David chose the corporation model they did for their packaging company because of its relatively minor reporting and operating requirements.

4.167 points   

QUESTION 9

Jeremy and Dianne operate a mid-sized corporation that provides much-needed services to the elderly in nursing homes across their state. They have designated their business as a not-for-profit corporation. Which of the following is NOT true of Jeremy and Dianne’s business?

	A.	Jeremy and Dianne’s business invests all monies over and above operating expenses back into the cause of the business.
	B.	Jeremy and Dianne’s business does not seek a profit.
	C.	Jeremy and Dianne’s business does not pay stockholders.
	D.	Jeremy and Dianne’s business pay higher federal taxes than do for-profit corporations.
	E.	Jeremy and Dianne’s business generate their revenues primarily through fund-raising and donations.

4.167 points   

QUESTION 10

Which of the following LEAST exemplifies a cooperative?

	A.	Machinists of Utah’s was formed in response to many businesses and business owners becoming dissatisfied with the marketplace’s inability to provide machining parts at affordable prices.
	B.	The profits earned by Thomas’ Manufacturing are invested back into its manufacturing services by Thomas’ owners.
	C.	The most important part of Florida’s Natural Growers is its members.
	D.	The owners of Growers of New England Apples use the apples they grow in their businesses and reinvest most profits back into the apple orchards.
	E.	Stammond Staples, a manufacturer of office products, pays its stockholders evenly distributed dividends from their monthly earnings and profits.

4.167 points   

QUESTION 11

Nathan’s Golf Equipment Supplier of Denver, Colorado has recently merged with Don’s Golf Supply, of Phoenix, Arizona. The two companies hope to, in joining forces, grow the new company into something even much bigger than the sum of their two parts. This merger is a ______.

	A.	product extension merger
	B.	horizontal merger
	C.	market extension merger
	D.	conglomeration
	E.	vertical merger

4.167 points   

QUESTION 12

Although Biotech and National Pharmaceuticals had little in common, their two founders recently decided to merge the two giant companies in an effort to obtain diversification. Their merger will be a ______.

	A.	product extension merger
	B.	horizontal merger
	C.	conglomeration
	D.	market extension merger
	E.	vertical merger

4.167 points   

QUESTION 13

Which of the following is NOT an advantage of setting up a sole proprietorship?

	A.	no separate tax return required
	B.	no specific corporate records to keep or reports to file
	C.	ease of formation
	D.	unlimited liability
	E.	greater control and flexibility to act quickly

4.167 points   

QUESTION 14

Which form of business ownership generates the most revenue in the United States?

	A.	C corporations
	B.	sole proprietorships
	C.	limited partnerships
	D.	S corporations
	E.	LLCs

4.167 points   

QUESTION 15

Which of the following is NOT an element of a partnership agreement?

	A.	stock options
	B.	capital contributions
	C.	decision making process
	D.	shares of profit and loss
	E.	responsibilities of partners

4.167 points   

QUESTION 16

Which of the following is the primary function of a limited partner?

	A.	to hire and fire employees
	B.	to market the product
	C.	to make decisions
	D.	to provide capital
	E.	to prepare reports

4.167 points   

QUESTION 17

In a corporate structure, which of the following groups sets policies for the company and makes major business and financing decisions?

	A.	board of directors
	B.	executive officers
	C.	shareholders
	D.	corporate officers
	E.	partners

4.167 points   

QUESTION 18

Who owns a corporation?

	A.	board of directors
	B.	the government
	C.	shareholders
	D.	executive officers
	E.	employees

4.167 points   

QUESTION 19

The structure of limited liability companies is most appropriate for professional corporations formed by accountants, attorneys, and doctors as it enables them to ______.

	A.	offer stock benefits to their employees
	B.	limit the number of members
	C.	freely transfer ownership interest
	D.	reap the benefits of a partnership while separating themselves from partner liability
	E.	preserve the business when a member of the company leaves

4.167 points   

QUESTION 20

Which of the following is NOT true of a corporation?

	A.	A corporation appears more stable and legitimate to clients and lenders.
	B.	A corporation raises capital through sale of stock and debt issue.
	C.	A corporation provides protection to the owners’ personal assets should claims be made against the corporation.
	D.	A corporation has its own tax return.
	E.	A corporation is terminated if an owner dies or leaves the business.

4.167 points   

QUESTION 21

Which of the following is true of a not-for-profit corporation?

	A.	Not-for-profit corporations have unlimited liability.
	B.	Not-for-profit corporations do not issue shares of stock.
	C.	Not-for-profit corporations do not pay normal operating expenses.
	D.	Not-for-profit corporations are not required to hold board meetings and keep complete books and records.
	E.	Not-for-profit corporations do not generate revenue.

4.167 points   

QUESTION 22

What is the most common reason for people to form a cooperative?

	A.	for minimizing tax liabilities
	B.	for providing service to people with common interests
	C.	for increased income potential
	D.	for greater control and flexibility
	E.	for better investment opportunities

4.167 points   

QUESTION 23

During a hostile takeover, which of the following is most likely to happen?

	A.	The acquiring firm offers to buy the target company’s stock at a price lower than its current value.
	B.	The acquiring firm offers to buy the target company’s stock at the current value.
	C.	The acquiring firm offers to buy the target company’s stock at a price higher than its current value.
	D.	The acquiring company tries to persuade the shareholders of the target company to vote out existing management and introduce management that is sympathetic to the goals of the acquiring company.
	E.	The acquiring firm and the target company come together cooperatively to form one company.

4.167 points   

QUESTION 24

What is the difference between a merger and an acquisition?

	A.	In a merger, one company buys out the other; in an acquisition, two companies consensually come together.
	B.	In a merger, two companies consensually come together; in an acquisition, one company buys out the other.
	C.	In a merger, a larger company buys a company through tender offer; in an acquisition, a smaller company is bought out by a bigger company.
	D.	In a merger, a larger company buys a company through the method of proxy fight; in an acquisition, two companies join together willingly.
	E.	In a merger, a company buys another through tender offer; in an acquisition, a company buys another through proxy fight.

Please provide answers asap,

thanks

Answer 1

1. B. Manuela has unlimited liability.

A sole proprietor has unlimited liability which means incase there's a situation to pay off the debtors, Manuela can be made to pay them off using her personal assets.

2. B. LLC.

LLC stands for limited liability company in which partners have limited liability to the extent of their share. Wo gerogina's best option will be this.

3. B. Judith and Robert will have unlimited liability.

Partners in a general partnership have unlimited liability.

4. A. Investments.

Investments should be avoided as company needs funds as capital.