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Test Bank for Corporate Finance, Canadian Edition, 5th edition Berk Chapter 1-31 A+
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Test Bank forCorporate Finance, Canadian
Edition, 5th edition Berk
Chapter 1-31
, TEST BANK FOR
Corporate Finance, Canadian Edition, 5th edition Berk Chapter 1-31
Chapter 1 The Corporation
1.1 The Three Types of Firms
1) A sole proprietorship is owned by:
A) one person
B) two or more people
C) shareholders
D) bankers Answer: A
Diff: 1 Type: MC
Topic: 1.1 The Three Types of Firms
2) In Canada, which of the following organization forms accounts for the greatest number of
firms?
A) Limited Liability Partnership
B) Limited Partnership
C) Sole Proprietorship
D) Publicly Traded Corporation Answer: C
Diff: 1 Type: MC
Topic: 1.1 The Three Types of Firms
,3) Which of the following organization forms earns the most revenue?
A) Privately Owned Corporation
B) Limited Partnership
C) Publicly Owned Corporation
D) Limited Liability Company Answer: C
Diff: 1 Type: MC
Topic: 1.1 The Three Types of Firms
4) Which of the following is NOT an advantage of a sole proprietorship?
A) Single taxation
B) Ease of setup
C) Limited liability
D) No separation of ownership and control Answer: C
Diff: 2 Type: MC
Topic: 1.1 The Three Types of Firms
, 5) Which of the following statements regarding limited partnerships is TRUE?
A) There is no limit on a limited partner's liability.
B) A limited partner's liability is limited by the amount of his investment.
C) A limited partner is not liable until all of the assets of the general partners have been
exhausted.
D) A general partner's liability is limited by the amount of his investment. Answer: B
Diff: 2 Type: MC
Topic: 1.1 The Three Types of Firms
6) Which of the following is/are an advantage(s) of incorporation?
A) Access to capital markets
B) Limited liability
C) Unlimited life
D) All of the above Answer: D
Diff: 2 Type: MC
Topic: 1.1 The Three Types of Firms
7) In Canada, a limited liability partnership, LLP, is essentially:
A) a limited partnership without limited partners
B) a limited partnership without a general partner
C) just another name for a limited partnership
D) just another name for a corporation Answer: B
Diff: 1 Type: MC
Topic: 1.1 The Three Types of Firms
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