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Types of Business Organizations: Help and Review 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 yellow "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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Question 1 1. How is a sole proprietorship taxed?

Question 2 2. Andrew, Allen, Alex and Abby are general partners. They own and run an Antelope farm. Andrew put up most of the money to establish the farm, while Abby spends the most time running the farm. There's no partnership agreement on how profits will be shared. How will the farm's profits be split?

Question 3 3. Betty and Bert start a bicycle repair business. Betty gives Bert $50,000 to start the business but Betty won't be involved in business operations. Bert will run the business by himself. Which of the following is NOT true?

Question 4 4. Which of the following is NOT considered to be an advantage of a general partnership?

Question 5 5. Jerry and Jenny are partners in a real estate investment group. Jerry invests $500,000 of his own money to acquire properties. Jenny is in charge of making the real estate transactions. However, Jerry makes a transaction on behalf of the group. Jerry's transaction is a bad deal and results in the group owing $800,000. Jerry can be held personally liable for:

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Question 6 6. The second step in ending a partnership is known as:

Question 7 7. In order to create a corporation, a company must file a charter with the state. These papers are called:

Question 8 8. How does an owner start a sole proprietorship?

Question 9 9. 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 10 10. A limited liability company is a hybrid of which two business structures?

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Question 11 11. Which of the following is NOT typically a process included in properly ending a partnership?

Question 12 12. Ernie and Ellis are partners in an engineering firm. They have a limited liability partnership. Each invested $20,000 to start the firm. Ernie recently gave bad advice that resulted in a large office building being built on a known land fault. The engineering firm was sued and now has to pay a $1,000,000 court judgment. Ernie can be held personally liable for:

Question 13 13. The main difference between a C Corp and an S Corp is:

Question 14 14. A corporation's board of directors is responsible for appointing:

Question 15 15. A corporation must develop a set of rules by which the company is organized and operated. These rules are called:

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Question 16 16. A corporation's owners are known as _____.

Question 17 17. Which of the following does NOT typically begin the process of ending a partnership?

Question 18 18. Paul owns stock in Party Portraits, Inc. This means Paul is:

Question 19 19. Once all steps to ending a partnership are complete the partnership is considered to be void, or:

Question 20 20. Sometimes a corporation's owners can be held personally liable for the corporation's debts. This concept is known as:

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Question 21 21. All of the following are disadvantages of a general partnership EXCEPT _____.

Question 22 22. The shareholders of Party Portraits, Inc. appointed Paco to the board of directors. This means Paco is:

Question 23 23. When a corporation wishes to initiate a voluntary termination of the corporation, who must first vote on the matter?

Question 24 24. How does an owner incorporate a sole proprietorship?

Question 25 25. Jack and Jill form a partnership in order to build a well. The partnership agreement defines the term of the partnership as six months or until the well is complete, whichever comes first. The well is complete after just four months. Jack and Jill go their separate ways. This is known as:

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Question 26 26. Which feature of a limited liability company is most like that of a corporation?

Question 27 27. Partnerships are a popular type of business because:

Question 28 28. Which of the following is usually an attribute of common stock?

Question 29 29. Jack and Jill form a partnership. Jack becomes disabled and is no longer able to participate in the partnership. He decides to sell his portion of the business. Their partnership agreement says that Jack must first offer to sell to Jill. This arrangement is known as:

Question 30 30. Jerry and Jenny are partners in a real estate investment group. Jerry invests $500,000 of his own money to acquire properties. Jenny handles the real estate transactions. Jenny is a:

Types of Business Organizations: Help and Review 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 yellow "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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