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202. An entrepreneur who wishes to start a business with little delay or hassle, and who wants
to be his or her own boss, should organize the business as a:
203. Which of the following statements is the most accurate? Sole proprietorships:
204. Although sole proprietors do not pay any special taxes, as the owner of the business you
are also an employee of the business, which requires you to:
205. Being your own boss means:
206. Joe Jackson operates a sole proprietorship, but he is in poor health and may be unable to
continue running the business. If Joe becomes incapacitated, his business:
207. Maria has a lot of self-confidence and business knowledge. She recently opened a bakery
as a sole proprietor. She is expecting a high level of profits and is looking forward to:
208. Kali owns Dog Trotters, a dog-walking business that she started to earn money after
school and supplement her allowance. She planned to keep all the profits, and has kept things
simple by putting a flier on the bulletin board at the local grocery store announcing that she was
available to provide this service. Kali's business is a:
209. Nick wants to start his own business. Nick should consider a sole proprietorship if he:
210. Javier is the sole proprietor of a golf shop. Because he is a sole proprietor, any profit
Javier's business earns is:
211. Selma owns a roofing business. She enjoys being her own boss, but her satisfaction
comes at a price. Her days are filled with organizing the activities of her employees and soliciting
new customers. She often misses activities with friends and family because of the obligations of
running her own business. She also knows that she has unlimited personal liability for any of her
firm's debts. Selma's business is organized as a(n):
212. Halle wants to start a business. She has two goals. First, given her limited personal
wealth and eagerness to get started, she wants to get her business up and running with the least
possible hassle and expense. Second, she wants to minimize her personal risk in the event that
her company experiences difficulties. If Halle chooses a sole proprietorship, she would:
213. In a partnership, a(n) __________ partner (owner) actively manages the company and has
unlimited liability for claims against the firm.
214. A partner (owner) who invests money in a business does not take an active role in
managing the operation, and is only subject to losing the funds he/she invested.
215. The limited liability provided to limited partners means that they are not responsible for
the debts of the business beyond:
216. According to the Uniform Partnership Act, the three key elements of any general
partnership are:
217. A type of partnership called a ___________ acts much like a corporation and is traded on
stock exchanges, but it is taxed like a partnership with profits passing through to the owners and
taxed as the owner's personal income.
218. Compared to a sole proprietorship, which of the following is considered an advantage of a
general partnership?
219. In a limited liability partnership, each partner's risk of losing personal assets is:
220. Which of the following is an advantage of a partnership?
221. When entering into a new partnership, a good strategy is to:
222. One difference between partnerships and sole proprietorships is that partnerships:
223. Which of the following statements about partnerships is most accurate?
224. When comparing general partnerships to sole proprietorships, an advantage of
partnerships is that they:
225. A good reason why partners should spell out the details of their partnership
arrangements in writing is:
226. A master limited partnership (MLP) is:
227. Which of the following is not a disclosure that should be part of a partnership
agreement?
228. One way to eliminate some of the risk of your partners making costly mistakes that could
jeopardize your personal assets is to set up a:
229. Finley is a limited partner in Gettout & Associates. Heywood U. Gettout, one of the
general partners in the company, must temporarily leave the company to attend to some personal
matters. Heywood has asked Finley to perform his managerial duties while he is gone. As a
limited partner, Finley:
230. Kristen and her brothers and sisters decided to form a partnership that specializes in
home design of all types. One of their goals is to maintain the loving relationship they currently
enjoy, so they are following the Model Business Corporation Act recommendations as they write
the partnership agreement. Which of the following is an accurate recommendation of the Act?
231. Maya plans to open a shop specializing in foods and cultural items from the Middle East.
She wants to be the firm's only general partner, but she is trying to get several friends to
participate as limited partners. Apparently Maya wants to:
232. Zach and Mac own an auto repair business that they operate as co-owners. Both take an
active role in the management of the business, and each accepts unlimited liability. Zach and
Mac operate as a ________.
233. Mel, Tim, and Bill agreed to partner in a small rehab business. Initially, they were
enthusiastic contributors until their first project took more work than Mel initially estimated; Tim
wanted morning meetings and long lunch hours; and Bill decided to go on vacation even though
the project was not complete and ready to sell. As Figure 5.2 indicates,
234. Jamie and Maria invested all their savings in a small pizzeria they opened outside the
University of Western Kentucky. They operated the business as a general partnership. After 11
months, the business went broke and Jamie and Maria were left with outstanding bills of
$37,500, which was more than their initial investment in the company. Jamie and Maria can:
235. Randy and Mandy plan to pool their money and musical talents to form a general
partnership and begin booking weekend gigs. One of the first things Randy and Mandy should do
is:
236. Travis has agreed to invest $16,000 in a partnership with his sister and brother-in-law.
He does not intend to actively work in the partnership, nor does he wish to risk any of his own
assets other than the $16,000 he initially invests. The partnership has agreed to permit him to
share in the profits. As an expert on forms of business ownership, you know that Travis is a
______________ in this partnership.
