Business Management: Chapter 16 Review

A partner's personal contribution in a business is equity capital.

• True

• False

Retained earnings are a type of equity capital.

• True

• False

Businesses in financial difficulty often have trouble getting debt capital.

• True

• False

Common stock is a type of security, but bonds are not.

• True

• False

Preferred stockholders usually have voting privileges at the stockholders' meetings.

• True

• False

When a corporation ceases operations, preferred and common stockholders usually get all their investment back from the sale of assets.

• True

• False

When starting a business, it is usually desirable to issue only common stock.

• True

• False

Retained earnings are kept in the business in the form of cash only.

• True

• False

Equipment maintenance and insurance are usually included in a leasing agreement.

• True

• False

The original cost of obtaining long-term capital is usually higher than that of short-term capital.

• True

• False