F24 - Forms of Business Ownership

What does GAAP stand for?

• Generally Accepted Accounting Principles
• Generally Available Access Protection
• Generally Accepted Attorney-Client Privilege
• None of these

Corporations that declare stock splits usually do this when:

• The price/share of the company has increased
• The corporation wants to lower the per share price so that more investors are able to afford it
• The price/share of the company has decreased
• The corporation wants to increase the per share price so that more investors are interested in buying the stock

When corporations declare 2:1 stock splits, ____

• The price/share of the company normally increases
• The number of shares doubles
• The price/share of the company normally decreases
• The number of shares is cut in half

Franchisors are typically _______.

• Sole proprietorships
• Partnerships
• Corporations
• All of these

Franchisees can be _____.

• Sole proprietorships
• Partnerships
• Corporations
• Any of these

Which form of business ownership accounts for 15 percent of business revenues and involves shared ownership?

• a) Sole proprietorship
• b) Partnership
• c) Corporation
• d) Franchising

What is the primary legal disadvantage of sole proprietorships?

• a) Limited liability
• b) Unlimited liability
• c) Tax complexity
• d) Inability to raise capital

Which of these situtations do partnerhsips most often solve with insurance policies?

• a) Filing tax returns
• b) Calculating profits
• c) The death of a partner
• d) Inability to attract qualified employees

Which type of partner in a limited partnership has unlimited liability but actively manages the business?

• a) General partner
• b) Silent partner
• c) Nominal partner
• d) Limited partner

What do corporations most often do when they want to raise large amounts of capital to expand the business?

• a) Use an IPO
• b) Sell most of their assets
• c) The owners take out personal loans
• d) Reduce business expenses