2) Which of the following organization forms for a business does NOT avoid double taxation?
v v v v v v v v v v v v v
A) Limited partnership v
B) "C" corporation
v
C) "S" corporation
v
D) Limited liability company v v
Answer: B
v v
Diff: 1
v
Section: 1.1 The Four Types of
v v v v v
FirmsSkill: Conceptual
v v v
3) Which of the following organization forms accounts for the most revenue?
v v v v v v v v v v
A) "S" corporation
v
B) Limited partnership v
C) "C" corporation
v
D) Limited liability company v v
Answer: C
v v
Diff: 1
v
Section: 1.1 The Four Types of
v v v v v
FirmsSkill: Conceptual
v v v
4) Which of the following organization forms accounts for the greatest number of firms?
v v v v v v v v v v v v
A) "S" corporation
v
B) Limited partnership v
C) Sole proprietorship
v
D) "C" corporation
v
Answer: C
v v
,Diff: 1
v
Section: 1.1 The Four Types of
v v v v v
FirmsSkill: Conceptual
v v v
, 5) Which of the following is NOT an advantage of a sole proprietorship?
v v v v v v v v v v v
A) Single taxation v
B) Ease of setup v v
C) Limited liability v
D) No separation of ownership and control
v v v v v
Answer: C
v v
Diff: 2
v
Section: 1.1 The Four Types of
v v v v v
FirmsSkill: Conceptual
v v v
6) Which of the following statements regarding limited partnerships is TRUE?
v v v v v v v v v
A) There is no limit on a limited partner's liability.
v v v v v v v v
B) A limited partner's liability is limited by the amount of their investment.
v v v v v v v v v v v
C) A limited partner is not liable until all the assets of the general partners have been exhausted.
v v v v v v v v v v v v v v v v
D) A general partner's liability is limited by the amount of their investment.
v v v v v v v v v v v
Answer: B
v v
Diff: 2
v
Section: 1.1 The Four Types of
v v v v v
FirmsSkill: Conceptual
v v v
7) Which of the following is/are an advantage of incorporation?
v v v v v v v v
A) Access to capital markets v v v
B) Limited liability v
C) Unlimited life v
D) All of the above
v v v
Answer: D
v v
Diff: 2
v
Section: 1.1 The Four Types of
v v v v v
FirmsSkill: Conceptual
v v v
8) Which of the following statements is most correct?
v v v v v v v
A) An advantage to incorporation is that it allows for less regulation of the business.
v v v v v v v v v v v v v
B) An advantage of a corporation is that it is subject to double taxation.
v v v v v v v v v v v v
C) Unlike a partnership, a disadvantage of a corporation is that has limited liability.
v v v v v v v v v v v v
D) Corporations face more regulations when compared to partnerships.
v v v v v v v
Answer: D
v v
Diff: 2
v
Section: 1.1 The Four Types of
v v v v v
FirmsSkill: Conceptual
v v v
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