TJ_Comp 20_TB_Ch41

TJ_Comp 20_TB_Ch41 - Chapter 41TYPES OF BUSINESS...

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Chapter 41—TYPES OF BUSINESS ORGANIZATIONS TRUE/FALSE 1. A sole proprietor must file a certificate indicating that he or she is commencing operations and pay a single organizational fee. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 2. A sole proprietorship must pay, at the corporate income tax rate, income taxes based on the net earn- ings of the sole proprietorship. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 3. A sole proprietor is subject to unlimited personal liability for the debts of the business. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 4. Partnership agreements must always be in written form. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 5. Partnership agreements allow individuals to conduct their business without the requirement of a formal organizational structure. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 6. A partnership is dissolved by the death of a partner. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 7. A corporation must have at least two shareholders. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 8. Business corporations exist to make a profit. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 9. The major advantage to investors in a corporation stems from the fact that their risk of loss is limited to the amount of their investment. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 10. In a corporation, a large number of investors may pool their assets to finance a large business enter- prise. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 11. The death of a majority shareholder terminates a corporate enterprise. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic
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12. It costs money to incorporate. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 13. Distributions of profits from a corporation to its shareholders are subject to a form of double taxation. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 14. The limited liability of a corporate form entails the expenditure of funds for organizational expenses. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 15. A joint venture typically relates to the carrying out of a single enterprise or transaction. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 16. Many courts hold that a joint venture is not subject to the same principles of law as is a partnership. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 17. The actions of one joint venturer cannot impose liability on a co-venturer. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 18. Unincorporated associations generally are formed to further a common purpose. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 19. Social clubs, fraternal associations, and political parties often are unincorporated associations. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 20. Holders of automobile dealership franchises are protected from bad-faith termination of their dealer- ships by federal law. ANS: T
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This note was uploaded on 02/22/2012 for the course BUS BUS212 taught by Professor Manney during the Spring '12 term at FSU.

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TJ_Comp 20_TB_Ch41 - Chapter 41TYPES OF BUSINESS...

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