Essay on Cross 9e TBB Ch17 - 2488 Words

Chapter 17 Small Business Organizations N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows. N A question new to this edition of the Test Bank. + A question modified from the previous edition of the Test Bank. = A question included in the previous edition of the Test Bank. TRUE/FALSE QUESTIONS 1. A sole proprietor does not own the entire business. ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal 2. In choosing a form of business organization for a new enterprise, impor ­tant factors include the ability to raise capital. ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Critical Thinking 3. A sole proprietor is free to make any decision he or she wishes†¦show more content†¦As a sole proprietor, on the business’s profits, Kari pays a. no income taxes. b. only personal income taxes. c. only business income taxes. d. both personal and business income taxes. ANSWER: B PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal 2. Silvano owns Textbooks Plus, a sole proprietorship that sells textbooks and other school supplies. When Silvano dies, Textbooks Plus will automatically a. dissolve. b. pass to Silvano’s heirs. c. pass to the state. d. be offered for sale to its creditors and competitors. ANSWER: A PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal 3. Noah and Orin do business as Personnel Providers, an employment agency. In most states, for purposes of suing and being sued, Personnel Providers, which is a partnership, would be treated as a. an aggregate of the individual partners. b. a natural person. c. an entity. d. a non-existent party. ANSWER: C PAGES: Section 2 TYPE: + BUSPROG: Reflective AICPA: BB-Legal 4. Luke and Maya form Northwest Air Express, a general partnership. The essential elements of this partnership do not include a. a sharing of profits and losses. b. a joint ownership of the business. c. an equal right to management in the business. d. goodwill. ANSWER: D PAGES: Section 2 TYPE: N BUSPROG: Reflective AICPA: BB-Legal 5. Bayside Marina Company and Canoes Kayaks Inc., share officers, directors, employees, property, and equipment. In reliance