Intro to Business - Ch. 4 Quiz

A sole proprietor has unlimited liability in meeting the debts of his or her business.

• True

• False

Limited partners do not participate in the management of the business.

• True

• False

The assets and liabilities of a corporation are separate from its owners.

• True

• False

An S corporation is taxed just like any other corporation.

• True

• False

A strategic alliance occurs when one company purchases another company by buying most of its stock.

• True

• False

Most tender offers of corporate raiders are hostile.

• True

• False

What is an advantage of a sole proprietorship?

• It has limited liability for the debts incurred by the business.

• It is hard to dissolve.

• It is unaffected by the death or withdrawal of its owner.

• It is easy and inexpensive to form.

Carmen owns a small gift shop and is solely responsible for its debts and liabilities. She is also entitled to all the profits the shop makes after paying off taxes and other expenses. Her business is an example of a(n)

• joint venture

• S corporation

• sole proprietorship

• partnership

Which form of business organization is the most common in the United States?

• partnerships

• sole proprietorships

• S corporations

• joint ventures

Which form of business ownership has the most freedom from government regulation?

• partnership

• corporation

• limited liability company

• sole proprietorship