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Multiple Choice
1. There are businesses in the United States.
a. over 30 million
b. under 20 million
c. over 50 million
d. less than 500,000
e. too many
2. The majority of businesses in the United States are:
a. sole proprietorships
b. non-taxable
c. corporations
d. non-profit
e. partnerships
3. The majority of businesses in the United States are:
a. partnerships
b. non-taxable
c. corporations
d. non-profit
e. none of the other choices are correct
4. The most common form of business organization is:
a. joint venture
b. partnership
c. proprietorship
d. corporation
e. none of the other choices
5. A person doing business for himself or herself is a(n):
a. single proprietor
b. sole proprietor
c. only proprietor
d. partner
e. general proprietor
6. A person doing business for himself or herself is a:
a. registered proprietor
b. manager
c. corporate proprietor
d. partner
e. none of the other choices are correct
7. The oldest and simplest form of business organization is:
a. joint venture
b. partnership
c. syndicate
d. cooperative
e. none of the other choices
8. The oldest and simplest form of business organization is the:
a. joint venture
b. limited partnership
c. syndicate
d. cooperative
e. proprietorship
9. A(n) is any name other than the name of the individual who owns the business.
a. fake name
b. illegitimate name
c. false name
d. fictitious name
e. confusing name
10. A sole proprietorship comes into existence when:
a. a person in business hires at least one employee
b. two or more persons join together to work at a business
c. a charter is received from the secretary of state
d. a person begins to do business for herself
e. when a federal tax identification number is issued for the business
11. A sole proprietorship comes into existence when:
a. a person in business hires at least one employee
b. two or more persons join together to work at a business
c. a charter is received from the secretary of state
d. when a federal tax identification number is issued for the business
e. none of the other choices
12. In a sole proprietorship, the owner is:
a. the business
b. a corporation
c. a subsidiary
d. a partnership
e. an amalgamation
13. In a sole proprietorship, the owner is:
a. the business
b. a corporation
c. a subsidiary
d. a partnership
e. none of the other choices
14. A person doing business for herself is a ; the business is a .
a. partner; partnership
b. general partner; limited partnership
c. sole proprietor; proprietorship
d. shareholder; corporation
e. member; syndicate
15. A person doing business for herself is a ; the business is a .
a. partner; partnership
b. general partner; limited partnership
c. member; syndicate
d. shareholder; corporation
e. none of the other choices
16. In a sole proprietorship, the capital usually:
a. must come from the owner's own resources or be borrowed
b. comes from the government
c. comes from investors
d. comes from the stock market
e. comes from taxes
17. In a sole proprietorship, the capital usually:
a. comes from taxes
b. comes from the government
c. comes from investors
d. comes from the stock market
e. none of the other choices are correct
18. In a sole proprietorship, profits are taxed to the:
a. corporate owner of the proprietorship
b. individual owner of the proprietorship
c. general partners
d. state
e. none of the other choices
19. A disadvantage of the sole proprietorship form is often:
a. business profits are taxed to the owner personally
b. the limited alternatives for raising financial capital
c. the owner has sole responsibility for control, liabilities, and management
d. the record keeping formalities of the business are within the owner's discretion
e. none of the other choices
20. A disadvantage of the sole proprietorship form is often:
a. business profits are taxed to the owner personally
b. the owner is personally liable for all the business debts
c. the owner has sole responsibility for control, liabilities, and management
d. the record keeping formalities of the business are within the owner's discretion
e. none of the other choices
21. Which of the following is a disadvantage of a sole proprietorship:
a. business profits are taxed to the owner personally
b. the owner is personally liable for all the business debts
c. the limited alternatives for raising financial capital
d. both b and c are disadvantages of a sole proprietorship
e. both a and c are disadvantages of a sole proprietorship
22. Which of the following apply to a sole proprietorship:
a. a person is in business for himself
b. no government license usually required
c. no tax return required in the name of the business
d. a person is in business for himself and no government license usually required
e. none of the other choices
23. The owner of a sole proprietorship:
a. is legally the same as the business
b. is taxed the same as the business
c. may hire any number of employees
d. is legally the same as the business and is taxed the same as the business
e. is legally the same as the business and is taxed the same as the business and may hire any number of
employees
24. A is an association of two or more persons to carry on a business as co-owners for profit.
a. proprietorship
b. corporation
c. partnership
d. cooperative
e. all of the other choices
25. A is an association of two or more persons to carry on a business as co-owners for profit.
a. proprietorship
b. corporation
c. sole proprietorship
d. cooperative
e. none of the other choices are correct
26. A general partnership is:
a. an association of two or more persons to carry on a business as co-owners for a profit
b. an association of two or more companies that help each other with business, but do not share profits
c. an understanding between a supplier and a distributor
d. a merger of two corporations
e. none of the other choices are correct
27. Under traditional common law rules, a partnership:
a. was always treated as a single legal entity
b. generally was not treated as a single legal entity
c. had the same legal personality as a corporation
d. was forbidden under the law
e. could only be formed with the consent of the state
28. Under traditional common law rules, a partnership:
a. was always treated as a single legal entity
b. could only be formed with the consent of the state
c. had the same legal personality as a corporation
d. was forbidden under the law
e. none of the other choices
29. Under traditional common law rules, if you wanted to sue a partnership you had to:
a. sue each partner individually
b. sue the partnership as a group
c. sue the state on behalf of the partnership
d. have the state sue the partnership
e. wait until the partnership was incorporated to sue
30. Under traditional common law rules, if you wanted to sue a partnership you had to:
a. wait until the partnership was incorporated to sue
b. sue the partnership as a group
c. sue the state on behalf of the partnership
d. have the state sue the partnership
e. none of the other choices
31. In most circumstances, a partnership is now treated as:
a. a legal entity
b. a special entity with no ability to sue or be sued
c. a proxy
d. a sole proprietorship
e. none of the other choices are correct
32. The provides "default rules" that determine the operation of partnerships when the partnership agreement is
silent or where there is no formal agreement among the partners.
a. Revised Uniform Proprietorship Act
b. Revised Uniform Partnership Act
c. Revised Real Partnership Act
d. Revised Unified Partnership Act
e. Revised Universal Partnership Act
33. The provides "default rules" that determine the operation of partnerships when the partnership agreement is
silent or where there is no formal agreement among the partners.
a. Revised Uniform Proprietorship Act
b. Revised Universal Partnership Act
c. Revised Real Partnership Act
d. Revised Unified Partnership Act
e. none of the other choices are correct
34. Which of the following is not true about a partnership?
a. it must be owned by two or more people
b. it is always an independent legal entity
c. partners co-own the business
d. partners share control over the business operation
e. all of the other choices are true
35. A partnership can begin with:
a. an implied agreement that can be inferred from the conduct of the parties doing business
b. a written agreement
c. an oral agreement
d. a written agreement or an oral agreement only
e. a written agreement or an oral agreement or an implied agreement that can be inferred from the conduct of
the parties doing business
36. A partnership can begin with either a(n) or a(n) .
a. oral agreement; implied agreement
b. oral agreement; false agreement
c. oral agreement; forced agreement
d. implied agreement; default agreement
e. implied agreement; loan agreement
37. A written partnership agreement typically specifies the following except:
a. the ownership interests of the partners
b. the method of accounting to be used
c. the name of the partnership business
d. the procedures for dissolution of the partnership
e. all of the other choices are usually included in the agreement
38. A written partnership agreement typically specifies the following except:
a. the ownership interests of the partners
b. that the partnership will be established under federal or state law
c. the name of the partnership business
d. the procedures for dissolution of the partnership
e. the method of accounting to be used
39. Which of the following are usually included in a written partnership agreement:
a. name of the partnership
b. the allocation of ownership shares
c. accounting rules
d. voting rights of the partners
e. all of the other specific choices are usually included
40. Which of the following are usually included in a written partnership agreement:
a. place and date of formation
b. the distribution of profits
c. priority rights in payments
d. how partnership shares will be valued
e. all of the other specific choices are usually included
41. Which of the following are usually included in a written partnership agreement:
a. state law that applies to the partnership
b. contributions of the partners
c. limits on transfers of partnership shares
d. how partnership shares will be valued
e. all of the other specific choices are usually included
42. In Zhou v. Bickley, Zhou helped Bickley start a motorcycle repair shop. When they got into a dispute later, the
courts held that:
a. Zhou and Bickley were partners, so each was owed the fair market value of his share in the organization
b. Bickley was a partner but breached his duty to Zhou by not working, so could be fired from the
partnership
c. Bickley was not a partner, he was an employee subject to wrongful dismissal and could sue for damages
for that
d. Zhou and Bickley were not partners, Bickley owed Zhou for money received to start the business run by
Bickley
e. none of the other choices
43. In Zhou v. Bickley, Zhou helped Bickley start a motorcycle repair shop. When they got into a dispute later, the
courts held that:
a. Zhou and Bickley were partners, so each was owed the fair market value of his share in the organization
b. Bickley was a partner but breached his duty to Zhou by not working, so could be fired from the
partnership
c. Bickley was not a partner, he was an employee subject to wrongful dismissal and could sue for damages
for that
d. Zhou and Bickley were partners, as Zhou provided funds needed to start the business that was largely run
by Bickley
e. none of the other choices
44. Compared to the U.S., new businesses in Japan:
a. are created more frequently than they are in the U.S.
b. are created much less frequently than they are in the U.S.
c. are greatly encouraged by banking regulations
d. are greatly encouraged by Japanese tax rates
e. may operate with less money than U.S. businesses
45. In Japan small businesses are:
a. greatly favored by the government
b. exempt from most taxes
c. considered very desirable places to work
d. considered less desirable places to work
e. formed at a much faster rate than in the United States
46. In Japan small businesses are:
a. greatly favored by the government
b. exempt from most taxes
c. considered very desirable places to work
d. discriminated against by government policy
e. formed at a much faster rate than in the United States
47. In Japan small businesses are:
a. greatly favored by the government
b. exempt from most taxes
c. considered very desirable places to work
d. formed at a much faster rate than in the United States
e. none of the other choices are correct
48. Partners in a partnership owe each other:
a. direct interest responsibility
b. a duty to contribute direct assets
c. a fiduciary duty
d. a duty of ordinary care
e. none of the other choices
49. The duty of partners to a partnership is:
a. to elect one partner as managing partner
b. to place the assets in a blind trust
c. based on extraordinary trust and loyalty to the partnership
d. to elect one partner as managing partner and is based on extraordinary trust and loyalty to the partnership
e. to elect one partner as managing partner and to place the assets in a blind trust and is based on extraordinary
trust and loyalty to the partnership
50. A requires that each partner act in good faith for the benefit of the partnership.
a. partnership relationship
b. contractual relationship
c. fiduciary relationship
d. contractual promise
e. none of the other choices are correct
51. Unless otherwise stated by contract, the law of partnership presumes which of the following not to be true?
a. each partner has an equal voice in partnership management
b. a majority vote controls ordinary business decisions
c. only managing partners are fully responsible for debts of the partnership
d. regardless of the amount invested in the partnership, each partner has an equal vote
e. all of the other choices are true
52. Unless otherwise stated by contract, the law of partnership presumes which of the following not to be true?
a. each partner has an equal voice in partnership management
b. a majority vote controls ordinary business decisions
c. profits are to be divided among the partners
d. regardless of the amount invested in the partnership, each partner has an equal vote
e. all of the other choices are true
53. Gary and Sue start a consulting firm. They are co-owners of it and have joint control over its operation and the right
to share in its profits. Their organization is most likely a:
a. proprietorship
b. partnership
c. business trust
d. corporation
e. syndicate
54. Which of the following is a decision that would most likely require the consent of all partners:
a. changing the nature of the partnership's business
b. admitting new partners
c. selling the business
d. all of the other specific choices are correct
e. none of the other specific choices are correct
55. A change in the relationship of the partners that shows an unwillingness or an inability to continue with business
may bring about of the partnership.
a. finalization b.
termination c.
composition d.
revitalization e.
retaliation
56. A change in the relationship of the partners that shows an unwillingness or an inability to continue with business
may bring about of the partnership.
a. finalization
b. retaliation
c. composition
d. revitalization
e. none of the other choices are correct
57. A complete termination comes about only after the partnership has been and its affairs have been wound up.
a. dissolved
b. disillusioned
c. standardized
d. reorganized
e. finalized
58. A complete termination comes about only after the partnership has been and its affairs have been wound up.
a. finalized
b. disillusioned
c. standardized
d. reorganized
e. none of the other choices are correct
