Question 1

Loans made by partners to a partnership are partnership capital.

Accepted Answer

A) True 
 B)False

Question 2

A ________ is owned by shareholders who elect a board of directors to manage the business.

Accepted Answer

A)  limited liability company
B)  corporation
C)  partnership
D)  sole proprietorshipE) A) and D)
F) None of the above

Question 3

Which of the following is an advantage of a limited partnership?

Accepted Answer

A)  It has the ability to attract large amounts of capital.
B)  It is a nontax paying entity.
C)  It can be created by default.
D)  It cannot be transferred to another person.E) B) and C)
F) A) and D)

Question 4

A mining partner's interest is:

Accepted Answer

A)  nontransferable.
B)  freely transferable.
C)  partially transferable.
D)  dissolved and later,transferred.E) All of the above
F) A) and B)

Question 5

Which of the following business forms means personal liability for the owner of the business?

Accepted Answer

A)  Sole proprietorship
B)  LLC
C)  Corporation
D)  LLPE) A) and D)
F) A) and B) A

Question 6

Which of the following statements about a transfer of a partner's transferable interest is true?

Accepted Answer

A)  The transfer entitles the transferee to become a partner of the partnership.
B)  The transferee has become the creditor of the transferable interest.
C)  The transferee can ask a court to dissolve and wind up the partnership,but only if the partnership is at will.
D)  The transferee has the right to inspect the partnership's books and records.E) A) and D)
F) A) and C)

Question 7

Which of the following is true of a corporation?

Accepted Answer

A)  A corporation is not a tax-paying entity for federal income tax purposes.
B)  A corporation does not have a life separate from its owners and its managers.
C)  A corporation has the ability to attract capital,more than the limited partnership.
D)  A corporation is owned by partners who have founded the business and have the right to manage it.E) C) and D)
F) All of the above

Question 8

John is a partner of Aegon Services,a limited liability partnership firm.He committed fraud and embezzled $1 million from a client.The other partners would not be personally liable for John's malpractice.

Accepted Answer

A) True 
 B)False

Question 9

A written agreement to the effect that the parties do not intend to form a partnership is not conclusive if their actions provide evidence of their intent to form a relationship that meets the RUPA partnership test.

Accepted Answer

A) True 
 B)False  True

Question 10

Which of the following is an advantage of a sole proprietorship?

Accepted Answer

A)  Owners of sole proprietorships can raise a lot of capital quickly for expansion purposes.
B)  The owner of a sole proprietorship has complete control over the business.
C)  The sole proprietorship's existence does not depend entirely upon the sole proprietor.
D)  The owner of a sole proprietorship has no liability.E) B) and D)
F) A) and B)

Question 11

As demonstrated in the case in the text,Finch v.Raymer,the presumption is very strong that:

Accepted Answer

A)  property purchased with partnership funds belongs to the partners on a pro rata basis.
B)  property purchased with partnership funds and used in the partnership belongs to the partnership.
C)  property purchased with partnership funds and used in the partnership belongs to the partner that initiated the transaction.
D)  property purchased with partnership funds and used in the partnership belongs to the partnership,as long as the property is titled to the partnership.E) A) and C)
F) B) and D)

Question 12

Which of the following is NOT an essential characteristic of a limited liability company (LLC) ?

Accepted Answer

A)  The LLC can elect to be taxed as a partnership or a corporation.
B)  Members' ownership interest is completely and freely transferable.
C)  Members have limited liability for the obligations of the LLC.
D)  The bankruptcy of one member does not dissolve the LLC.E) B) and C)
F) A) and D)

Question 13

An S corporation:

Accepted Answer

A)  must have at least 100 shareholders.
B)  may have only one class of shares.
C)  has the ability to attract capital,more than the limited partnership.
D)  has the disadvantage of its shareholders being double taxed at the federal tax level.E) B) and C)
F) A) and B) B

Question 14

Which of the following is true about the effect of purported partnerships?

Accepted Answer

A)  Purported partners share profits of the business.
B)  A purported partner does not have authority to make contracts for the partnership.
C)  A purported partner is liable on contracts entered into by third parties on their belief that he is a partner.
D)  A purported partner is not liable for the torts committed in the course of relationships entered by third parties who believed he was a partner.E) A) and D)
F) None of the above

Question 15

A partner's contribution is called ________.

Accepted Answer

A)  partnership property
B)  partnership liability
C)  partnership cash flow
D)  partnership capitalE) A) and B)
F) B) and C)

Question 16

In a limited partnership,general partners:

Accepted Answer

A)  have the right to manage the business.
B)  are not liable for the firm's debts.
C)  are nonparticipating investors.
D)  cannot transfer their ownership interest.E) C) and D)
F) None of the above

Question 17

Loans made by partners to a partnership are:

Accepted Answer

A)  partnership property.
B)  partnership capital.
C)  partnership cash flow.
D)  partnership liabilities.E) A) and C)
F) B) and C)

Question 18

The equity of a partnership is called partnership capital.

Accepted Answer

A) True 
 B)False

Question 19

A(n) ________ is a limited partnership whose partners have elected limited liability status for all the partners.

Accepted Answer

A)  corporation
B)  LLLP
C)  S Corporation
D)  LLPE) None of the above
F) A) and B)

Question 20

Dr.Matt Fornfeld,a physician practicing as a sole proprietor,falls behind on his payments to First Bank,a creditor to whom he owes $275,000.First Bank agrees to take reduced payments from Matt,but wants more money if Matt's practice becomes more profitable.Matt agrees to pay First Bank at least $4,000 per month up to a maximum of 15 percent of his profits.Does this agreement make First Bank a partner with Matt?

Accepted Answer

No.First Bank is sharing profits as a cr...

Exam 37: Introduction to Forms of Business and Formation of Partnerships

Loans made by partners to a partnership are partnership capital.

Correct Answer
verified

A ________ is owned by shareholders who elect a board of directors to manage the business.

Correct Answer
verified

Which of the following is an advantage of a limited partnership?

Correct Answer
verified

A mining partner's interest is:

Correct Answer
verified

Which of the following business forms means personal liability for the owner of the business?

Correct Answer
verified
A

Which of the following statements about a transfer of a partner's transferable interest is true?

Correct Answer
verified

Which of the following is true of a corporation?

Correct Answer
verified

John is a partner of Aegon Services,a limited liability partnership firm.He committed fraud and embezzled $1 million from a client.The other partners would not be personally liable for John's malpractice.

Correct Answer
verified

A written agreement to the effect that the parties do not intend to form a partnership is not conclusive if their actions provide evidence of their intent to form a relationship that meets the RUPA partnership test.

Correct Answer
verified
True

Which of the following is an advantage of a sole proprietorship?

Correct Answer
verified

As demonstrated in the case in the text,Finch v.Raymer,the presumption is very strong that:

Correct Answer
verified

Which of the following is NOT an essential characteristic of a limited liability company (LLC) ?

Correct Answer
verified

An S corporation:

Correct Answer
verified
B

Which of the following is true about the effect of purported partnerships?

Correct Answer
verified

A partner's contribution is called ________.

Correct Answer
verified

In a limited partnership,general partners:

Correct Answer
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Loans made by partners to a partnership are:

Correct Answer
verified

The equity of a partnership is called partnership capital.

Correct Answer
verified

A(n) ________ is a limited partnership whose partners have elected limited liability status for all the partners.

Correct Answer
verified

Correct Answer
verified
No.First Bank is sharing profits as a cr...
View Answer

Exam 37: Introduction to Forms of Business and Formation of Partnerships

Loans made by partners to a partnership are partnership capital.

Correct AnswerverifiedShow Answer

A ________ is owned by shareholders who elect a board of directors to manage the business.

Correct AnswerverifiedShow Answer

Which of the following is an advantage of a limited partnership?

Correct AnswerverifiedShow Answer

A mining partner's interest is:

Correct AnswerverifiedShow Answer

Which of the following business forms means personal liability for the owner of the business?

Correct AnswerverifiedA

Which of the following statements about a transfer of a partner's transferable interest is true?

Correct AnswerverifiedShow Answer

Which of the following is true of a corporation?

Correct AnswerverifiedShow Answer

John is a partner of Aegon Services,a limited liability partnership firm.He committed fraud and embezzled $1 million from a client.The other partners would not be personally liable for John's malpractice.

Correct AnswerverifiedShow Answer

A written agreement to the effect that the parties do not intend to form a partnership is not conclusive if their actions provide evidence of their intent to form a relationship that meets the RUPA partnership test.

Correct AnswerverifiedTrue

Which of the following is an advantage of a sole proprietorship?

Correct AnswerverifiedShow Answer

As demonstrated in the case in the text,Finch v.Raymer,the presumption is very strong that:

Correct AnswerverifiedShow Answer

Which of the following is NOT an essential characteristic of a limited liability company (LLC) ?

Correct AnswerverifiedShow Answer

An S corporation:

Correct AnswerverifiedB

Which of the following is true about the effect of purported partnerships?

Correct AnswerverifiedShow Answer

A partner's contribution is called ________.

Correct AnswerverifiedShow Answer

In a limited partnership,general partners:

Correct AnswerverifiedShow Answer

Loans made by partners to a partnership are:

Correct AnswerverifiedShow Answer

The equity of a partnership is called partnership capital.

Correct AnswerverifiedShow Answer

A(n) ________ is a limited partnership whose partners have elected limited liability status for all the partners.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNo.First Bank is sharing profits as a cr...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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True

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
No.First Bank is sharing profits as a cr...
View Answer