MULTIPLE CHOICE QUESTIONS

Distinguish between corporations and sole proprietorshipsin terms of the following characteristics:a. Owners’ liability for debts of the business.b. Transferability of ownership interest.c. Continuity of existence.d. Federal taxation on income.

A C corporation can be described as:  (a) A business that is separate and distinct from its owners, allowing the owners to conduct business while limiting their personal liability.  (b) A business association defined by federal statute.  (c) A legal entity that has more than one shareholder.  (d) A type of corporation where owners have limited liability, and income, expenses, and deductions flow through to the shareholders and are taxed only at the shareholder level.

Which of the following show why a corporation is the most important form of business? ☐ Corporations can vote in general elections. Corporations can enter into contracts. Corporations can sue and be sued. A corporation is a separate legal entity with the ability to acquire and exchange property.

6:32 Blackboard 1. The proprietorship form of business organization must have at least two owners in most states. a. generally receives favorable tax treatment relative to a corporation. b. combines the records of the business with the C. personal records of the owner. is classified as a separate legal entity. d. A business organized as a corporation 2. is not a separate legal entity in most states. a. b. requires that stockholders be personally liable for the debts of the business. is owned by its stockholders. C. has tax advantages over a proprietorship or partnership. d. The partnership form of business organization 3. is a separate legal entity. a. is a common form of organization for service- type businesses. b. enjoys an unlimited life. C. has limited liability. d. 4. External users of accounting information, like the Internal Revenue Service, are most commonly known as taxing authorities. a. labor unions. b. customers. C. regulatory agencies. d. Which of the following statements…

s

1. List and describe the four corporate characteristics. 2. Give an example of pass-through taxation and double taxation. Which characteristics does a sole proprietorship or partnership have and how are they taxed? 3. 4. Which of the corporate characteristics does an S-corporation have and how are they taxed? 5. What limitations are S-corporations subject to? 6. Which corporate characteristics does a Limited Liability Company Have and how are they taxed? 7. Discuss the agency problem between the firm's owners and the firm's managers. How can the firms' owners minimize this agency problem?

Select the best term for each definition below.       Definitions Terms a. Shareholders can lose no more than the amount they invest in the company.   b. Corporate earnings are taxed twice—at the corporate level and individual shareholder level.   c. Like an S corporation, but there are no limitations on the number of owners as in an S corporation.   d. Traces the line of authority within the corporation.   e. Allows for legal treatment as a corporation, but tax treatment as a partnership.   f. Has stock traded on a stock exchange such as the New York Stock Exchange (NYSE).   g. The first time a corporation issues stock to the public.   h. Describes (a) the nature of the firm’s business activities, (b) the shares to be issued, and (c) the composition of the initial board of directors.

The economic entity assumption requires that the activities Select one: a. of a sole proprietorship cannot be distinguished from the personal economic events of its owners. b.of an entity be kept separate from the activities of its owner. c. of different entities can be combined if all the entities are corporations. d.must be reported to the Securities and Exchange Commission.

Which of the following characteristics best describes a corporation?  business with a single owner Is not taxed Stockholders not personally liable for entity’s debts Not a separate taxable entity

Which of the following statements is true of a sole​ proprietorship?     A. A sole proprietorship has to pay business income taxes.   B. A sole proprietorship joins two or more individuals as co−owners.   C. The sole proprietor is personally liable for the liabilities of the business.   D. A sole proprietorship is taxed separately from the owner.

Which of the following is not true of a corporation? Oa. It may enter into binding legal contracts in its own name. Ob. It may sue and be sued. c. The acts of its owners bind the corporation. Od. It may buy, own, and sell property.

1.Details the tax liability of corporations to the IRS. 2.Identifies the similarities and differences in the tax liability of corporations, individuals, partnerships, and self-employed business owners in the United States.

________ is a separate entity and in that capacity can borrow from banks, bondholders, preferred stockholders, and common shareholders. A.        limited partnership B.         sole proprietorship C.         government organization D. public company

Which of the following is a characteristic of a corporation?A) Unlimited liability for its ownersB) Owners are personally responsible for the corporation's debtsC) Ownership is easily transferable through the sale of stockD) Corporations are taxed at lower rates than partnerships