1) Alsolelproprietorshiplislownedlby:
A) onelperson
B) twolorlmorelpeople
C) shareholders
D) bankersl
3 Answer:l3
A
Diff:l1 Type:lMC
Topic:l3 1.1l3 ThelThreelTypesloflFirms
2) InlCanada,lwhichloflthelfollowinglorganizationlformslaccountslforlthelgreatestlnumberloflfir3
ms?
A) LimitedlLiabilitylPartnership
B) LimitedlPartnership
C) SolelProprietorship
D) PubliclylTradedlCorporationl
3 Answer:l3C
3) Whichloflthelfollowinglorganizationlformslearnslthelmostlrevenue?
A) PrivatelylOwnedlCorporation
B) LimitedlPartnership
C) PubliclylOwnedlCorporation
D) LimitedlLiabilitylCompanyl
3 Answer:l3C
4) WhichloflthelfollowinglislNOTlanladvantageloflalsolelproprietorship?
A) Singleltaxation
B) Easeloflsetup
C) Limitedlliability
D) Nolseparationloflownershiplandlcontroll
3 Answer:l3C
,5) WhichloflthelfollowinglstatementslregardingllimitedlpartnershipslislTRUE?
A) Therelislnollimitlonlallimitedlpartner'slliability.
B) Allimitedlpartner'slliabilitylisllimitedlbylthelamountloflhislinvestment.
C) Allimitedlpartnerlislnotlliableluntillallloflthelassetsloflthelgenerallpartnerslhavelbeenlexh3
austed.
D) Algenerallpartner'slliabilitylisllimitedlbylthelamountloflhislinvestment.lAn3
swer:l3B
Diff:l2 Type:lMC
Topic:l3 1.1l3 ThelThreelTypesloflFirms
6) Whichloflthelfollowinglis/arelanladvantage(s)loflincorporation?
A) Accessltolcapitallmarkets
B) Limitedlliability
C) Unlimitedllife
D) Allloflthelabovel
3 Answer:l3D
7) InlCanada,lallimitedlliabilitylpartnership,lLLP,lislessentially:
A) allimitedlpartnershiplwithoutllimitedlpartners
B) allimitedlpartnershiplwithoutlalgenerallpartner
C) justlanotherlnamelforlallimitedlpartnership
D) justlanotherlnamelforlalcorporationl
3 Answer:l3B
8) InlCanada,lwhichloflthelfollowinglbusinesslorganizationlformslcannotlavoidldoubleltaxation?
A) LimitedlPartnership
B) PubliclylTradedlCorporation
C) PrivatelylOwnedlCorporation
D) LimitedlLiabilitylCompanyl
3 Answer:l3B
9) InlCanada,ltheldividendltaxlcreditlgiveslsomelrelieflby:
A) effectivelylgivinglallowerltaxlratelonldividendlincomelthanlonlotherlsourcesloflincome
B) effectivelylgivinglalhigherltaxlratelonldividendlincomelthanlonlotherlsourcesloflincome
C) effectivelylgivinglthelsameltaxlratelonldividendlincomelaslonlotherlsourcesloflincome
D) effectivelylgivinglaltaxlrateloflzerolonldividendlincomelcomparedltolotherlsourcesloflincomelAns3
wer:l3A
Diff:l1 Type:lMC
Topic:l3 1.1l3 ThelThreelTypesloflFirms
, 10) Whichloflthelfollowinglstatementslislmostlcorrect?
A) Anladvantageltolincorporationlislthatlitlallowslforllesslregulationloflthelbusiness.
B) Anladvantageloflalcorporationlislthatlitlislsubjectltoldoubleltaxation.
C) Unlikelalpartnership,laldisadvantageloflalcorporationlislthatlitlhasllimitedlliability.
D) Corporationslfacelmorelregulationslwhenlcomparedltolpartnerships.lA3
nswer:l3D
Diff:l2 Type:lMC
Topic:l3 1.1l3 ThelThreelTypesloflFirms
11) InlCanada,ltheldistinguishinglfeatureloflalcorporationlislthat:
A) therelislnollegalldifferencelbetweenlthelcorporationlandlitslowners
B) itlislallegallyldefined,lartificiallbeing,lseparatelfromlitslowners
C) itlspreadslliabilitylforlitslcorporatelobligationsltolalllshareholders
D) itlprovidesllimitedlliabilitylonlyltolsmalllshareholderslA3
nswer:l3B
Diff:l2 Type:lMC
Topic:l3 1.1l3 ThelThreelTypesloflFirms
12) Whichloflthelfollowinglis/arelsubjectltoldoubleltaxationlinlCanada?
A) Corporation
B) Partnership
C) Solelproprietorship
D) BothlAlandlBl
3 Answer:l3A
13) CanadalRevenuelAgency,lCRA,lallowslanlexemptionlfromldoubleltaxationlforlcertainlflowlthr3
oughlentitieslwherelalllincomelproducedlbylthelbusinesslflowsltolthelinvestorslandlvirtuallylnolear3ni
ngslarelretainedlwithinlthelbusiness.lTheselentitieslarelcalled:
A) CanadianlFederallCrownlCorporations
B) CanadianlControlledlCorporations
C) IncomelTrustlCorporations
D) ForeignlControlledlCorporationsl
3 Answer:l3C
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