1. (TCO 6) Which of the following statements about corporations is true? (Points : 2)
Only after the articles of incorporation are filed does the corporation come into existence.
The owners of a corporation are called the board of directors.
The corporation should make modest filings monthly with the state to keep its records up to date, usually accompanied by a small fee.
The cost of corporations accounting systems generally reflects the decision to operate in corporate form, not their scale of operation.
2. (TCO 6) Which of the following has the highest priority for payment upon dissolution and winding up of a corporation? (Points : 2)
Dividend arrearages owed to preferred shareholders
Claims of common shareholders for return of capital contributions
Claims of outside creditors
Claims of directors for loans made to the corporation
3. (TCO 6) Noah, Doris, and Francis set up a service to grow plants and give them to residents of hospitals and nursing homes. Francis only helps out when she can. As they are all independently wealthy, any money they receive from donations from grateful individuals is used for plants, fertilizer, pots, and potting soil. Do they have a partnership? (Points : 2)
No, because there is no written partnership agreement
No, because they are not in business to make a profit
No, because this is an improper purpose for a partnership
No, because they do not share the duties equally
4. (TCO 6) Which of the following is true of the sole proprietorship form of business organization? (Points : 2)
It is the most common form of business organization in the U.S.
There are many legal formalities required to create a sole proprietorship.
It cannot have employees; the owner is the only person who is involved in the business.
A sole proprietorship is a taxable entity.
5. (TCO 6) The major reason for the creation of limited liability partnerships was: (Points : 2)
tax generating concerns of the IRS.
concerns about the continuity of sole proprietorships.
liability concerns of accountants, lawyers and other professionals who were in traditional partnerships.
the excessive taxes being paid by limited partnerships.
6. (TCO 8) The SEC requires registered corporations to file a Form 10 Q: (Points : 2)
whenever there is a change in control, change in auditor, or resignation of a director.
whenever there are major asset acquisitions and dispositions, and bankruptcy.
which includes information very similar to that found in an IPO registration statement, including audited financial statements.
which contains year to date information and unaudited interim financial statements.
7. (TCO 8) Which of the following statements about tender offers is false? (Points : 2)
The offeror announces that it wishes to acquire a specific number of shares.
It identifies where stockholders who want to participate must deliver their shares.
It specifies the opening bid price.
If less than the desired number of shares is tendered, the tender offeror can decrease the offering price.
8. (TCO 8) The purchase of a share of _____ makes that shareholder an owner of the company. (Points : 2)
9. (TCO 8) So called _____ is often seen as one of the major drawbacks in choosing to incorporate. (Points : 2)
10. (TCO 8) In a _____ partnership, the partners manage the business and are NOT personally liable for all losses. (Points : 2)