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Exam 4: Choosing a Form of Business Ownership

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Question 91

Multiple Choice

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The major reason why businesses change from sole proprietorships to other forms of ownership is to

A) gain unlimited liability.
B) avoid unlimited liability.
C) avoid lack of continuity.
D) obtain help and eliminate the problem of too much to do in one day.
E) offer advancement opportunities for employees.

F) A) and E)
G) A) and B)

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Question 92

Multiple Choice

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Tiffany is about to finish her degree in business management and wants to find a job that will provide her with opportunities to advance within an organization.What type of business organization should Tiffany work for?

A) a sole proprietorship
B) a small family-owned business that is incorporated
C) a partnership
D) a corporation
E) an unlimited partnership

F) A) and D)
G) All of the above

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Question 93

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A voluntary association of two or more people acting as co-owners of a business is known as a partnership.

Compared to a corporation, a partnership is more difficult and expensive to establish.

Which of the following is an example of a horizontal merger?

The person who assumes full co-ownership of a partnership, including unlimited liability, is a _____.

Corporations account for about 83 percent of all sales revenues.

How might a sole proprietorship have a possible tax advantage?

A temporary association organized to perform a specific task requiring a large amount of capital is known as a(n) _____.

Quarrels among business associates have become common.The associates quarrel over what products the firm should sell, division of authority, selection of personnel, whether to bring family members into the business, whether to expand, and who is contributing most to the firm's success.Such feuding, which damages business relationships, occurs most frequently in what form of business?

After Flora has gotten all the money she can from the bank and still cannot keep up with her fast-growing business, what is she most likely to do next if she wants her company to continue growing?

Describe the advantages and disadvantages of a corporation.

Most master limited partnerships include

Glenn owns and operates a large hardware store in Missouri that employs about fifty people.He delegates some of the decision making to two managers, but he remains the only owner.Glenn's business is organized as a _____.

Keisha Cook and Donnie Blackman decide to go into business together.They start by writing an agreement listing and explaining the terms of the business they will both own, along with each of their responsibilities.Keisha and Donnie created a(n)

Units of ownership in a master limited partnership (MLP) are often sold on organized security exchanges.

Mark owns stock in Walgreens.He has the right to vote on company issues and examine corporate records, and he receives dividends from Walgreens' profits.What type of stock does Mark own?

A partnership formed to operate for a specific time period or to accomplish a specific purpose is known as a _____.

Wade Comer and Tom Busby decide to start a partnership and offer accounting services.Which of the following is the best way to start this partnership?

B&G, Inc. A year ago, Kevin went to work for B&G, Inc.He has worked for the finance department ever since he started.He noticed that the corporation was only taxed as though it were a partnership.This was something that he found very odd when he first started working for the company, but he later realized it was a fairly common practice.He recognized that this was one of the advantages of this type of corporation. While the job was challenging, Kevin was not happy.He wanted to work for a company whose main goal was to provide service to the community, not to make a profit.However, Kevin felt that, considering his present financial situation, he had to continue working for B&G, Inc.A week later, Kevin discovered there was going to be a merger between B&G, Inc.and one of its major competitors.Kevin's boss informed him that he would be getting a promotion and a raise.While he was excited about making more money, he still was not happy.He knew then that he would not be working for the company for long. -Refer to B&G, Inc.What type of organization was Kevin considering switching to?