ABT 49 Spring 2024 Midterm #1

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Which company legal structure offers some tax advantages to the owners?

• A. Sole proprietorship
• B. Partnership
• C. Corporation
• D. Limited Liability Company
• E. All of the above.

Which company legal structure exposes the owners to the greatest legal liability?

• A. Sole proprietorship
• B. Partnership
• C. Corporation
• D. Limited Liability Company
• E. All of the above.

Which company legal structure is considered a hybrid of two other structures?

• A. Sole proprietorship
• B. Partnership
• C. Corporation
• D. Limited Liability Company
• E. All of the above.

Which company legal structure has the greatest continuity during changes in ownership?

• A. Sole proprietorship
• B. Partnership
• C. Corporation
• D. Limited Liability Company
• E. All of the above.

Which company legal structure is the easiest to establish?

• Sole proprietorships
• B. Partnership
• C. Corporation
• D. Limited Liability Company
• E. All of the above.

Which of the following is NOT a typical business strategy?

• Part Time (Minimum investment, minimum return)
• Specialty product or service
• High volume, low cost/margin
• Low volume, low cost/margin
• Low volume, high cost/margin

Which of the following are true about business lines of credit?

• A. They should be paid down to a zero balance at least once per year.
• B. They should not be used for capital improvements or purchases.
• C. They are intended to overcome the seasonality of many businesses.
• D. They are intended for cashflow purposes only!
• E. All of the above.

When seeking a grant from a government agency or non-profit foundation, you should describe in detail how your proposal, if funded, will _________________.

• A. benefit your business
• B. benefit your community.
• C. help the granting agency meet its goals.
• D. help the economy.
• E. decrease unemployment.

When choosing a business loan, the most important consideration is ______________.

• A. the lowest interest rate
• B. the shortest term (to pay it off as fast as possible)
• C. the longest term (to keep the monthly payment as low as possible)
• D. matching the term to the useful life of the asset
• E. the highest principle amount you can borrow