Question : 41) How do the owners of a partnership relate to : 1245176

41) How do the owners of a partnership relate to the business?

A) The owners and the business are not separate legal entities.

B) The owners and the business are separate legal entities.

C) The assets of the owners are considered separate from the asset of the business.

D) None of these describe the legal relationship of the owners to the business.

42) In a typical year, ________ new firms open in the United States.

A) more than 600,000

B) more than 1 million

C) less than 200,000

D) approximately 125,000

43) On average, jobs at small firms pay ________ wages than jobs at large firms and are ________ likely to offer fringe benefits such as health insurance and retirement accounts.

A) higher; more

B) lower; more

C) higher; less

D) lower; less

44) How does the owner of a corporation relate to the business?

A) The owners of the business have a separate legal distinction from the business.

B) The owners of the business have no separate legal distinction from the business.

C) The personal assets are part of the corporation’s assets.

D) None of these describe the legal relationship of corporate owners to the business.

45) If the personal assets of the owners cannot be claimed if the business is bankrupt, the owners are said to have

A) unlimited liability.

B) a proprietorship type of business.

C) limited liability.

D) a partnership type of business.

46) Which of the following is not an advantage of starting a new business as a proprietorship?

A) The owner has complete control over the business.

B) A proprietorship has few government rules and regulations to comply with.

C) Business profits are only taxed once, not twice.

D) A proprietorship can easily attain additional funding.

47) Jeremy is thinking of starting up a small business selling NASCAR memorabilia. He is considering setting up his business as a corporation. What is one advantage to Jeremy of setting up his business as a corporation?

A) By setting up the business as a corporation, Jeremy would not face double taxation.

B) By setting up the business as a corporation, Jeremy would have the ability to share risk with shareholders.

C) By setting up the business as a corporation, Jeremy would have both ownership and control over the business.

D) All of the above would be advantages of setting up his business as a corporation.

48) Jeremy is thinking of starting up a small business selling NASCAR memorabilia. He asks his friend, Carmen, if she’d like to join him in setting up a partnership to start the business. What is one disadvantage in joining the partnership that Carmen should consider?

A) Carmen should realize that profits in the partnership will be reduced by dividend payments to shareholders.

B) Carmen should realize that, as an owner of the business, she will be personally responsible for the debts of the business.

C) Carmen should realize that the profits of the business will also be taxed as dividend income, so she faces the potential for double taxation of that business income.

D) Carmen should realize that the Jeremy will have complete control over the business because it was his idea.

49) Which of the following is an advantage of starting a new business as a corporation?

A) double taxation

B) ease in setting up

C) low expenses of legally organizing

D) greater ability to raise funds

50) In the United States, corporate profits are taxed

A) only at the corporate level.

B) only when investors receive dividends.

C) at both the corporate level and when investors receive dividends.

D) neither at the corporate level nor when investors receive dividends.