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Organization Structures & Accounting Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. Which feature of a limited liability company is most like that of a corporation?

Question 2 2. A limited liability company is a hybrid of which two business structures?

Question 3 3. Which feature of a limited liability company is most like that of a partnership?

Question 4 4. Why is it a good idea to create a partnership agreement?

Question 5 5. What is the most significant risk factor in a sole proprietorship?

Page 2

Question 6 6. Mary and Joanne would like to start their own jewelry business. They do not want to file a bunch of papers, but also do not want to be personally liable for debts incurred by the company. Which form of ownership should they pursue?

Question 7 7. What type of partnership offers no protection from personal liability for the partners?

Question 8 8. What type of partnership has a general partner who has full liability and a limited partner whose liability is limited to their investment in the partnership?

Question 9 9. Which of the following is the best explanation of the main difference or differences between a limited partner and a general partner?

Question 10 10. A corporation's owners are known as _____.

Page 3

Question 11 11. Yoho Motors files for bankruptcy. The company's creditors then seek payment from the corporation and the shareholders. Why will the creditors NOT be able to recover their debts from the shareholders?

Question 12 12. Alisa owns Alright Business Services. It is a corporation, but Alisa does not use the word 'Incorporated' or 'Inc.' anywhere on her correspondence. Alisa is in charge of paying the bills for the business and sometimes writes rent checks out of her personal account. The business is not doing well, and is several months behind on making rent payments. Her landlord sues Alright Business Services and Alisa for the rent. How will the landlord recover the unpaid rent?

Question 13 13. What is the primary reason a business would decide to become a corporation over any other form of organization?

Question 14 14. What is the difference between an S-corporation and a C-corporation?

Question 15 15. What do you call the documentation that governs the corporation's activities?

Page 4

Question 16 16. Which statement shows the spending of money on everyday things?

Question 17 17. The purpose of a nonprofit is not to make money, but to do what?

Question 18 18. What type of taxes do a nonprofit pay?

Question 19 19. How many times is the profit of a sole proprietorship taxed?

Question 20 20. Which of these business types does not 'outlive' the business founder?

Page 5

Question 21 21. What is a sole proprietorship?

Question 22 22. Which of the following is NOT an aspect of a limited partnership?

Question 23 23. Which of the following is NOT an aspect of a general partnership?

Question 24 24. Betty and Bert start a bicycle repair business. Betty runs the shop and Bert fixes the bikes. Bert repairs Bea's bike, but he forgets to tighten the bolts on her seat. Bea falls off the bike and is injured. She sues the bike shop and is awarded a money judgment. Which of the following is true?

Question 25 25. How does an owner incorporate a sole proprietorship?

Page 6

Question 26 26. How is a sole proprietorship taxed?

Question 27 27. How many people typically work for a sole proprietorship?

Question 28 28. Which U.S. government agency has publications and a look-up tool of different not-for-profits?

Question 29 29. What is a main difference between not-for-profits and for-profits?

Question 30 30. What do not-for-profit organizations NOT have?

Organization Structures & Accounting Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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