Ch 4 OpenStax Homework

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Question #1

Croutakie seemed like a great idea. Chef Leo Nyami and Sara Rice decided to take advantage of the popularity of shitake mushrooms and create some shitake mushrooms products that could be sold to restaurant patrons and other gourmets through their new company. The mushrooms are expensive, and there were other unexpected financial problems, so Nyami and Rice asked Bill Ng to become a limited partner. This means that Ng:

A is limited in the number of hours he can work each month

B agrees not to participate in day-to-day management of the firm

C agrees to limit his expertise to a certain area, such as finance or marketing

D qualifies for a limited income tax rate

E is limited in the amount he can invest

Question #2

Thom Georges wants to open a store where he sells nothing but antique architectural features that he can salvage from old houses being torn down to make way for progress. He has an eye for the kind of doors, windows, mantels, and so forth that decorators want, but he does not have all the funding he needs to get started. He has invited his parents to invest $40,000 in the enterprise. He has told them that if they do invest, they would have liabilities in the firm equal to but no greater than their investment. Georges is trying to get them to form a _____ with him.

A general partnership

B limited partnership

C closely-held corporation

D cooperative

E joint venture

Question #3

Three Sisters Specialty Foods, owned by Judith Coker, Millie Humphreys, and Jade Watson, sells eggless cake mixes for people on a restricted diet. Coker recently purchased an industrial grade mixer without conferring with her sisters who were upset when they learned that they were all three liable for the payments on the mixer. Three Sisters is an example of a:

A joint partnership

B general partnership

C private corporation

D limited partnership

E closely held corporation

Question #4

Which of the following statements about a general partnership is true?

A Partners in a general partnership co-own the company’s assets.

B General partnerships are usually “double-taxed.”

C A general partnership is an entity separate from its owners.

D The partnership agreement must be in writing to be legal.

E A general partnership is the most popular form of business ownership.

Question #5

Croutakie seemed like a great idea. Chef Leo Nyami and Sara Rice decided to take advantage of the popularity of shitake mushrooms and create some shitake mushrooms products that could be sold to restaurant patrons and other gourmets through their new company. Nyami and Rice have recently abandoned their business because they could not pay its outstanding business debts. Since Nyami and Rice are both liable for the debts, their business was a(n):

A general partnership

B quasi corporation

C open corporation

D private corporation

E limited partnership

Question #6

Bob Nichol and Martha Bohner own and operate a small company that bakes and sells Thunder Muffins, gigantic muffins full of blueberries, blackberries, or raspberries. They sell the muffins at a local farm that is open to the public on weekends. Since they operate the business as a partnership, they should:

A agree to share the business’s profits and losses

B seek government assistance

C hire an outside consultant

D borrow as much as possible

E hire a manager to operate the business

Question #7

A S-partnership

B general cooperative

C sole partnership

D general partnership

E limited cooperative

Question #8

Partnership agreements generally specify all of following EXCEPT:

A management responsibilities

B methods of taxation of each partner

C steps in dissolving the entity

D contributions of each partner

E provisions for senior partnership interests

Question #9

Stewed Tomatoes was an “all-girl power-pop trio.” Its three members realized that many musicians feel stifled when making music in a sterile studio environment while the clock ticked away expensive hours, so the three girl band members created Materville Studios, a multimedia production house and recording studio in downtown Chicago. They share work responsibilities and profits equally. Materville Studios is a(n):

A partnership

B double proprietorship

C S corporation

D sole proprietorship

E cooperative

Question #10

Pete Yankin and Ken Lowery consider themselves to be experts on hunting in the mountains in North Carolina. As a result, the two men established a company that markets hunting expeditions. Yankin and Lowery share responsibilities for booking the trips, gathering supplies, and guiding groups of five to seven hunters into locations where they can hunt for deer and bear. Since the two will share any profit equally, this would be an example of a(n):

A cooperative

B S corporation

C double proprietorship

D partnership

E sole proprietorship

Question #11

Tonya Thomas is tired of working for other people. She wants to start her own administrative services businesses and control her own work schedule. She wants to have sole responsibility for all business decisions. Thomas should form a(n):

A sole proprietorship

B limited partnership

C limited cooperative

D joint venture

E S corporation

Question #12

Sole proprietorships:

A are more difficult to dissolve than partnerships

B have unlimited liability

C are more closely regulated by the government than other forms of business

D find is easy to raise needed capital

E are double taxed

Question #13

Suzanne Pogell wanted to learn to sail, but she could find no one to teach her because men were the ones who sailed, and women were their crew. She finally did convince someone to teach her to sail, and after mastering sailing, she started an all-woman sailing school called Womanship as a sole proprietorship. When she dies, the:

A business continues with the employees running it

B business dies with her

C business must shut down until after her will is probated

D business can be continued by any blood relative

E government takes over and sells the assets

Question #14

Which of the following is a disadvantage of sole proprietor ownership?

A Ease and low cost of formation

B Freedom from government regulation

C All profits to the owner

D Unlimited liability

E Ease of dissolution

Question #15

Which of the following is a disadvantage of sole proprietor ownership?

A No special taxation

B Ease of dissolution

C Freedom from government regulation

D Ease of formation

E Difficulty in raising capital

Question #16

A term that means that business damages and/or debts can also be attached to the personal assets of the owners is ______ liability.

A funding

B asset

C limited

D informal

E unlimited

Question #17

Paul Hyatt owns and operates DeepClean, a Florida-based company that cleans up mold and mildew in homes and businesses. As the sole proprietor of the business, he has unlimited liability, which means:

A he is fully liable for all business debts

B he is free from government regulation

C he usually has to put in an unlimited number of hours

D he must have liability insurance

E he has unlimited access to funds

Question #18

The form of business ownership that has the most difficulty in raising capital is the:

A limited partnership

B corporation

C cooperative

D general partnership

E sole proprietorship

Question #19

The form of business ownership that is easiest to dissolve is the:

A sole proprietorship

B subsidiary

C public corporation

D limited partnership

E cooperative

Question #20

Which type of business organization experiences the least governmental regulation?

A Joint venture

B Public corporation

C Private corporation

D Limited partnership

E Sole proprietorship

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Ch 4 OpenStax Homework

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