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Exam 6: Forms of Business Ownership

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Question 31

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In a sole proprietor ownership,if business assets are not enough to pay business debts,then personal assets,such as the sole proprietor's house,personal investments,and retirement plans can be used to pay the debt.This is called ________.

A) unlimited liability
B) limited liability
C) non-liability
D) double taxation
E) sole liability

F) A) and B)
G) A) and C)

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Question 32

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Mergers and acquisitions occur when two companies decide to combine resources and work toward a common goal.Although a number of acquisitions may not be friendly,they still help to keep businesses alive.What are some of the factors that may influence one company to merge with another?

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Companies are often looking for opportun...

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Question 33

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More than one-half of all mergers fail or do not live up to financial expectations.

Delta and Northwest Airlines merged in April 2008,creating an airline with a fleet of 800 planes.The merger took place amid widespread concern about rising fuel prices.What type of merger took place between Delta and Northwest? Explain this type of merger.

When two companies in entirely different industries combine,it is known as a ________.

S corporations are similar to C corporations because they both pay corporate income taxes.

Which of the following methods do not-for-profit corporations primarily use to generate revenues?

The owners of a corporation are known as general corporate partners.

At a meeting to announce a merger with another company,which of the following buzzwords is a business leader MOST likely to use to justify the decision?

Becca and Bob own a car rental business.Becca contributes 75 percent of the capital but does only 20 percent of the work,while Bob contributes 25 percent of the capital but does 80 percent of the work.Both decide on a 50/50 allocation of profits.In which types of business structures would this arrangement be possible?

All of the following are advantages of sole proprietorship EXCEPT ________.

Arthur is a truck driver who owns his own business.He has been on the road for several months,and the constant wear and tear on his truck results in the need for several major mechanical repairs.This generates a loss for his business.Which of the following reflects how this will affect Arthur's tax obligation?

Kris and Amy own a workout facility in which they are co-owners.Both take an active role in the management of the business and each accepts unlimited liability.Kris and Amy operate as a ________.

A conglomeration occurs when two companies selling different but related products in the same market combine.

Sarah,Mike and Mark are dentists who would like to form a partnership.They have decided to form a limited liability corporation.Explain why this is a good choice for their dental practice.

A sole proprietor's income and expenses flow through ________.

Which of the following is a disadvantage of forming a corporation?

A partner who invests money in a business but is not involved in the day-to-day operation and is only risking capital equal to what they have contributed is called a ________.

What is the difference between a general partnership and a limited partnership? What would be some reasons for choosing a limited partnership?

All of the following are advantages of forming a corporation EXCEPT ________.