Corporations and Other Types of Businesses 3.3.3 ACNT2

A _____ rights, privileges, and liabilities are beyond those of an individual.

• corporation's

• sole proprietorship's

• partnership's

• limited liability company's (LLC's)

From an accounting standpoint, how is a partnership different from a sole proprietorship?

• A partnership has both a drawing account and a capital account.

• A partnership has both a drawing account and a capital account.

• Owners in a partnership are paid salaries or wages by their company

• Expenses for owners' draws are reported on the income statement of a partnership.

In a partnership, the profits, authority, and responsibilities are divided among the owners _____.

• depending on each partner's contributions

• equally

• depending on the terms of the partnership agreement

• depending on their time with the partnership

Which type of business requires multiple, complex steps to create it as well as dissolve it?

• A partnership

• Both a sole proprietorship and a partnership

• A sole proprietorship

• Both a limited liability company (LLC) and a corporation

Which of the following statements is true about the use of GAAP by government agencies?

• Government agencies are never required to follow GAAP.

• Government agencies are always required to follow GAAP.

• Government agencies are required to follow GAAP only if the company is large and has a certain number of employees.

• Government agencies are required to follow GAAP only if the company is unable to support itself from the revenues it generates.

Corporate bylaws should include all of the following information EXCEPT _____.

• information about stockholders, voting shares of stock, and the number and type of stock

• the political affiliations of board officers

• names of corporate board officers and their duties

• Identifying information for the corporation

To fill out the articles of incorporation, Susan needs the all of following information EXCEPT _____.

• the company's business name

• the duration that the company will exist

• a description of employee benefits

• the purpose of establishing the company

Obtaining an employer identification number (EIN) is important for all of the following EXCEPT _____.

• preventing identity theft

• establishing business credit

• opening a business bank account

• getting a tax exemption

Which corporate group's responsibilities include choosing executives and setting their compensation?

• Board of directors

• The executives themselves

• Shareholders

• Employees

For a corporation to be eligible for S corporation status, all of the following conditions must be met EXCEPT _____.

• it must have fewer than 100 stockholders

• it must be incorporated in another state

• it must have stockholders who are U.S. citizens

• It must offer only one class of stock