Ch10-tb-ele=2e

Download Document
Showing pages : 1 - 4 of 22
This preview has blurred sections. Sign up to view the full version! View Full Document
Chapter 10 Business Organizations TRUE/FALSE QUESTIONS 1. In a sole proprietorship, the owner receives all of the risk. ANSWER: T PAGE: 277 TYPE: N Objective: AACSB Analytic Skill Level: AICPA Legal 2. A sole proprietorship’s income is taxed only once. ANSWER: T PAGE: 277 TYPE: N Objective: AACSB Analytic Skill Level: AICPA Legal 3. A sole proprietorship’s income is taxed as the firm’s profits,   not   as the  owner’s personal income. ANSWER: F PAGE: 277 TYPE: N Objective: AACSB Analytic Skill Level: AICPA Legal 4. A partnership is never considered a legal entity apart from its owners. ANSWER: F PAGE: 277 TYPE: N Objective: AACSB Analytic Skill Level: AICPA Legal 5. The income from a partnership is taxed in the same manner as the income  from a sole proprietorship. ANSWER: F PAGE: 277 TYPE: N Objective: AACSB Analytic Skill Level: AICPA Legal 155
Background image of page 1
156 UNIT THREE: THE COMMERCIAL ENVIRONMENT 6. A  general partner is personally liable for partnership debts if the firm  cannot pay its creditors. ANSWER: T PAGE: 277 TYPE: N Objective: AACSB Analytic Skill Level: AICPA Legal 7. The formation of a limited partnership requires that a certificate of part- nership be filed in the state of formation. ANSWER: T PAGE: 278 TYPE: N Objective: AACSB Analytic Skill Level: AICPA Legal 8. In a limited partnership, the liability of a  general  partner is limited to the  amount of capital he or she has invested in the partnership. ANSWER: F PAGE: 278 TYPE: N Objective: AACSB Analytic Skill Level: AICPA Legal  9. A limited liability company is operated in compliance with state law. ANSWER: T PAGE: 279 TYPE: N Objective: AACSB Analytic Skill Level: AICPA Legal 10. For federal jurisdictional purposes, a limited liability company is treated  like a corporation. ANSWER: F PAGE: 280 TYPE: N Objective: AACSB Analytic Skill Level: AICPA Legal 11. A limited liability company is a citizen of every state of which its members  are citizens. ANSWER: T PAGE: 280 TYPE: N Objective: AACSB Analytic Skill Level: AICPA Legal 12. For federal income tax purposes, a limited liability company can choose to  be taxed like a corporation. ANSWER: T PAGE: 280 TYPE: = Objective: AACSB Analytic Skill Level: AICPA Legal 13. A limited liability company must have an operating agreement.
Background image of page 2
CHAPTER 10: BUSINESS ORGANIZATIONS 157 ANSWER: F PAGE: 280 TYPE: = Objective: AACSB Analytic Skill Level: AICPA Legal 14. In a limited liability company, members cannot participate in its manage- ment.
Background image of page 3
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.