c1.rtf - c1 Student 1. A.Theownerofthefirm B. C. D.Noone; 2.

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c1 Student: ___________________________________________________________________________ 1. The shareholders in a sole proprietorship are represented by:  A. The owner of the firm. B. The general partner of the firm. C. The board of directors of the firm. D. No one; sole proprietorships have no shareholders.   2. Which of the following would be considered an advantage of the sole proprietorship form of organization?  A. Wide access to capital markets B. Unlimited liability C. A pool of expertise D. Profits taxed at only one level   3. In a partnership form of organization, income tax liability, if any, is incurred by:  A. The partnership itself. B. The partners individually. C. Both the partnership and the partners. D. Neither the partnership nor the partners.   4. Which of the following would correctly differentiate general partners from limited partners in a limited  partnership?  A. General partners have more job experience. B. General partners have an ownership interest. C. General partners are subject to double taxation. D. General partners have unlimited personal liability.   5. One common reason for partnerships to convert to a corporate form of organization is that the partnership:  A. Faces rapidly growing financing requirements. B. Wishes to avoid double taxation of profits. C. Has issued all of its allotted shares. D. Agreement expires after ten years of use.  
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6. Unlimited liability is faced by the owners of:  A. Corporations. B. Partnerships and corporations. C. Sole proprietorships and partnerships. D. All forms of business organization.   7. Which of the following statements generally cannot be correct for an investor who faces unlimited liability on an investment?  A. The investor owns stock in the firm. B. The investor has no partners. C. The investor is subject to double taxation. D. The investor is responsible for managing the firm.   8. In the case of a professional corporation, ________ has/have limited liability.  A. Only the professionals B. Only the business C. Both the professionals  and  the business D. Neither the professionals  nor  the business   9. A board of directors is elected as a representative of the corporation's:  A. Top management. B. Stakeholders. C. Shareholders. D. Customers.   10. The legal "life" of a corporation is:  A. Coincident with that of its CEO. B. Equal to the life of the board of directors. C. Permanent, as long as shareholders don't change. D. Permanent, regardless of current ownership.
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