Chapter 6 Business Ownership T/F Review

Common stock represents the basic ownership interest in a corporation.

• True

• False

Sole proprietorships tend to be both larger and more profitable than partnerships.

• True

• False

A corporation is a business entity created by filing a form, which is known in most states as the articles of incorporation.

• True

• False

The most basic form of a partnership is known as a general partnership.

• True

• False

The most common type of corporation is an S corporation.

• True

• False

The earnings of not-for-profit corporations are exempt from federal and state income taxes.

• True

• False

One of the limitations of a not-for-profit corporation is that it cannot have stockholders.

• True

• False

A corporation can be a partner in a partnership.

• True

• False

A limited partnership is an agreement between two or more individuals to operate a business as co-owners for a limited period of time.

• True

• False

Corporations are by far the most common type of business organization in the United States.

• True

• False