In a conglomerate merger, two companies merge that are in different industries and each performs different activities.
Question 1 options:
True
False
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Question 2 (2 points) Question 2 Saved
Which statement is true of a general partnership?
Question 2 options:
Two or more partners are responsible for the business and share profits, liabilities, and management responsibilities.
The business pays a standard corporate income tax.
Some partners contribute only an investment but do not have any management responsibility or liability.
The liability of each partner is limited to his or her own acts and omissions.
The partnership acts like a corporation, selling stock on a stock exchange.
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Question 3 (2 points) Question 3 Unsaved
Marilyn and her sister Sharon opened a business that sold homemade bath products in decorative baskets. After many successful years, Marilyn wanted to hand down her part of the business to her daughter, Louise. But Sharon did not want to partner with Louise. Sharon insisted that Marilyn sell her Marilyn's share of the business. This situation reflects one of the basic drawbacks of being a partnership.
Question 3 options:
True
False
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Question 4 (2 points) Question 4 Unsaved
Melissa runs a small medical bills collections agency. She decides what to charge her customers, whom to hire, and how to grow the business. She allows her employees to bring their children to work on occasion and doesn't have to share financial information with anyone. Which benefit of running a sole proprietorship is described above?
Question 4 options:
keeping all the profits
keeping your taxes relatively simple
ending the business with ease
making all your own decisions
starting up the business with ease
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Question 5 (2 points) Question 5 Unsaved
Which of the following is NOT a benefit of being a sole proprietorship?
Question 5 options:
paying no income taxes
ending the business with ease
starting up the business with ease
keeping all the profits
making all your own decisions
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Question 6 (2 points) Question 6 Unsaved
Mergers and acquisitions are examples of internal expansion.
Question 6 options:
True
False
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Question 7 (2 points) Question 7 Unsaved
Lawrence has a small house painting business with two employees. Lawrence's father gave his son startup money and occasionally contributes to the business financially when Lawrence is having a cash flow problem but has nothing to do with the running of the business. Lawrence always pays his father back out of business profits. What kind of business does Lawrence have?
Question 7 options:
a sole proprietorship
a franchise
a cooperative
a partnership
a corporation
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Question 8 (2 points) Question 8 Unsaved
A sporting goods store is owned by its user members. The store is run by managers hired by a board of directors that was elected by shareholder members. What kind of company is the store?
Question 8 options:
a limited liability partnership
a limited liability company
a cooperative
a franchise
a B corporation
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Question 9 (2 points) Question 9 Unsaved
Which is an example of a vertical merger?
Question 9 options:
Microsoft merging with The Home Depot
Southwest Airlines merging with United Airlines
Norwegian Cruise Line merging with Royal Caribbean
Random House merging with Barnes & Noble
Mrs. Fields merging with Oakhurst Dairy
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Question 10 (2 points) Question 10 Unsaved
One of the benefits of being a sole proprietor is unlimited financial liability.
Question 10 options:
True
False
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Question 11 (2 points) Question 11 Unsaved
Fran's interior decorating business has grown since she opened it by herself three years ago. Now she has another decorator who shares in the managerial decision making and profits, as well as six decorators who share in the basic workload. Fran has restructured her company to reflect these changes and only these changes. What kind of company does Fran have now?
Question 11 options:
a limited liability partnership
a sole proprietorship
a limited liability company
a limited partnership
a general partnership
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Question 12 (2 points) Question 12 Unsaved
Which of the following is NOT a benefit of owning a franchise?
Question 12 options:
starting with name recognition
receiving marketing and management support
low startup costs
adopting a proven business model
owning your own business and being your own boss
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Question 13 (2 points) Question 13 Unsaved
What is the oldest, simplest, and the most common form of business ownership?
Question 13 options:
partnership
franchise
cooperative
corporation
sole proprietorship
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Question 14 (2 points) Question 14 Unsaved
Which type of corporation can have up to 100 owners, faces only one level of federal taxation, and can provide its owners with both salaries and distributions?
Question 14 options:
an S corporation
an LLP
a B corporation
an LLC
a C corporation
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Question 15 (2 points) Question 15 Unsaved
Pauline is a certified financial planner. She has chosen to set up her business such that she has the tax benefits of a sole proprietorshipone level of taxand is free of having to worry about annual reports and shareholder requirements. What kind of company does Pauline run?
Question 15 options:
an S corporation
a cooperative
a C corporation
a B corporation
a limited liability company
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Question 16 (2 points) Question 16 Unsaved
Manuel owns and operates a tow truck company by himself. His busiest times are usually holidays and long weekends, when lots of people are traveling and lots of cars are on the road. Working these times means Manuel is experiencing which drawback of being a sole proprietorship?
Question 16 options:
having to specialize in a variety of tasks
having limited financial resources and few fringe benefits
having management problems
not being able to sell or pass along his business
having unlimited financial liability, which means his personal possessions are at risk
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Question 17 (2 points) Question 17 Unsaved
What does it mean for a corporation to be taxed twice?
Question 17 options:
The corporation pays taxes on its profits and then is also taxed on the dividends it sends to its shareholders.
The corporation pays taxes on its profits and the shareholders pay taxes on the dividends they receive.
The shareholders split the taxes on the profits among them and also pay taxes on the dividends they receive.
The customers pay taxes on the products and services they purchase and then the corporation pays taxes on its profits.
The shareholders pay taxes on the products and services they sell and then the customers pay taxes on the dividends they receive.
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Question 18 (2 points) Question 18 Unsaved
After Skip retired from the fire department, he decided to open a sandwich shop near the beach. He paid his startup costslicenses, building rental, refrigeration, ingredients, and employee's initial paywith a loan he took out against his house. When a customer sued Skip, claiming she got sick from spoiled roast beef, Skip lost not only the business but also his house, his car, and part of his pension fund from the fire department. Which of the disadvantages of being a sole proprietorship explains Skip's fate?
Question 18 options:
not being able to sell the business
being overstressed about time
having limited financial resources
having unlimited financial liability
having management problems
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Question 19 (2 points) Question 19 Unsaved
When Selena started her all-natural homemade soaps business, she made and sold the soaps from her garage. Her father gave her startup money to pay for ingredients and packaging materials, which made him a silent partner. Selena has since paid him back in full. What kind of company is Selena's now?
Question 19 options:
a general partnership
a B corporation
a limited liability company
a sole proprietorship
a limited partnership
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Question 20 (2 points) Question 20 Unsaved
Which is an example of a conglomerate merger?
Question 20 options:
Frito-Lay merging with Pepsi
Chrysler merging with Ford
Peter Pan Bus Company merging with Greyhound
International Paper merging with Kraft Foods
Starbucks merging with Dunkin' Donuts