Question 1

In most states a sole proprietorship that operates under a trade name must file with the appropriate state agency.

Accepted Answer

A) True 
 B)False

Question 2

In general,all partners have equal rights in the management and conduct of the partnership business.

Accepted Answer

A) True 
 B)False

Question 3

Mark operates an auto parts shop.The shop has gone out of business,and all assets have been sold.The following debts remain: 1.$10,000 owed to suppliers for merchandise that was sold to customers.
2)$20,000 owed to suppliers for merchandise that was ruined in an unexpected flood.
3)$35,000 owed to a customer who has a final judgment in a product liability suit against the auto parts shop.
For which of these debts can Mark be held personally liable?

Accepted Answer

A)  None; they were all business debts. 
B)  1 only 
C)  1 and 2 only 
D)  1 and 3 only 
E)  1,2,and 3 
A)  None; they were all business debts. 
B)  1 only 
C)  1 and 2 only 
D)  1 and 3 only 
E)  1,2,and 3

Question 4

A release of one partner does not discharge the liability of the other partners.

Accepted Answer

A) True 
 B)False

Question 5

Partners are liable for damages caused by their negligence regardless if the negligence was cause by an honest error in judgment.

Accepted Answer

A) True 
 B)False

Question 6

A third party who has actually dealt with the partnership must be given actual notice of the partnership's dissolution or have acquired knowledge of the dissolution from another source.

Accepted Answer

A) True 
 B)False

Question 7

In order to use a fictitious name,a sole proprietorship must incorporate the business.

Accepted Answer

A) True 
 B)False

Question 8

A new partner who is admitted to a partnership is not liable for the existing debts and obligations of the partnership.

Accepted Answer

A) True 
 B)False

Question 9

It is difficult to transfer or sell a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 10

Under the UPA,partners are individually liable for the contracts and debts of the partnership.

Accepted Answer

A) True 
 B)False

Question 11

Does a sole proprietor have unlimited liability for any of the liabilities of the business?

Accepted Answer

A)  No. 
B)  Yes,but only for ordinary recurring types of expenses. 
C)  Yes,but only for foreseeable expenses and liabilities. 
D)  Yes,but only for debts if the owner specifically assumed personal liability when the debt was incurred. 
E)  Yes,for all debts of the business. 
A)  No. 
B)  Yes,but only for ordinary recurring types of expenses. 
C)  Yes,but only for foreseeable expenses and liabilities. 
D)  Yes,but only for debts if the owner specifically assumed personal liability when the debt was incurred. 
E)  Yes,for all debts of the business.

Question 12

If a person,operating a business as a sole proprietor,owes money to business creditors,those creditors may collect only from the assets of the business itself.

Accepted Answer

A) True 
 B)False

Question 13

If a sole proprietor closes a business that has no assets but owes money to a creditor,the owner is personally liable to pay the creditor.

Accepted Answer

A) True 
 B)False

Question 14

Each partner has a privacy right whereby they need not provide information affecting the partnership.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true about the choice of business entity for an entrepreneur?

Accepted Answer

A)  The choice will be determined by the amount of capital invested. 
B)  The Internal Revenue Service will determine the type of entity based on all the facts and circumstances. 
C)  The choice will be determined by whether the primary business is services or goods. 
D)  The choice will take into account many factors,with wide latitude in finding an entity that has all the characteristics desired. 
E)  The choice will take into account many factors,but the entrepreneur usually will have to accept substantial tradeoffs,as each different entity generally has a set of characteristics that must be accepted in total,the desirable and the undesirable. 
A)  The choice will be determined by the amount of capital invested. 
B)  The Internal Revenue Service will determine the type of entity based on all the facts and circumstances. 
C)  The choice will be determined by whether the primary business is services or goods. 
D)  The choice will take into account many factors,with wide latitude in finding an entity that has all the characteristics desired. 
E)  The choice will take into account many factors,but the entrepreneur usually will have to accept substantial tradeoffs,as each different entity generally has a set of characteristics that must be accepted in total,the desirable and the undesirable.

Question 16

A sole proprietor has unlimited liability for:

Accepted Answer

A)  personal,but not business debts 
B)  business,but not personal debts 
C)  both business and personal debts 
D)  neither business nor personal debts 
A)  personal,but not business debts 
B)  business,but not personal debts 
C)  both business and personal debts 
D)  neither business nor personal debts

Question 17

Upon termination of a partnership,the partners are entitled to have all of their capital contributions returned to them,so long as the partnerships creditors are paid in full.

Accepted Answer

A) True 
 B)False

Question 18

A sole proprietor is personally liable for the debts of the business.

Accepted Answer

A) True 
 B)False

Question 19

A partner who withdraws from a partnership for a term before the expiration of the term does not have the right to dissolve the partnership.

Accepted Answer

A) True 
 B)False

Question 20

When a partnership is continued and the old partnership is dissolved,the creditors of the old partnership do not become creditors of the new partnership.

Accepted Answer

A) True 
 B)False

Exam 34: Small Businesses, Entrepreneurs, and General Partnerships

In most states a sole proprietorship that operates under a trade name must file with the appropriate state agency.

In general,all partners have equal rights in the management and conduct of the partnership business.

A release of one partner does not discharge the liability of the other partners.

Partners are liable for damages caused by their negligence regardless if the negligence was cause by an honest error in judgment.

A third party who has actually dealt with the partnership must be given actual notice of the partnership's dissolution or have acquired knowledge of the dissolution from another source.

In order to use a fictitious name,a sole proprietorship must incorporate the business.

A new partner who is admitted to a partnership is not liable for the existing debts and obligations of the partnership.

It is difficult to transfer or sell a sole proprietorship.

Under the UPA,partners are individually liable for the contracts and debts of the partnership.

Does a sole proprietor have unlimited liability for any of the liabilities of the business?

If a person,operating a business as a sole proprietor,owes money to business creditors,those creditors may collect only from the assets of the business itself.

If a sole proprietor closes a business that has no assets but owes money to a creditor,the owner is personally liable to pay the creditor.

Each partner has a privacy right whereby they need not provide information affecting the partnership.

Which of the following is true about the choice of business entity for an entrepreneur?

A sole proprietor has unlimited liability for:

Upon termination of a partnership,the partners are entitled to have all of their capital contributions returned to them,so long as the partnerships creditors are paid in full.

A sole proprietor is personally liable for the debts of the business.

A partner who withdraws from a partnership for a term before the expiration of the term does not have the right to dissolve the partnership.

When a partnership is continued and the old partnership is dissolved,the creditors of the old partnership do not become creditors of the new partnership.

Legal Heritage and the Information Age

Court Systems and Jurisdiction

Judicial, Alternative, and Online Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Strict Liability and Product Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crimes

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Capacity and Legality

Genuineness of Assent and Undue Influence

Statute of Frauds and Equitable Exceptions

Third-Party Rights and Discharge

Remedies for Breach of Traditional and E-Contracts

Internet Law and E-Commerce

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Sales and Lease Warranties

Creation of Negotiable Instruments

Transferability and Holder In Due Course

Liability,Defenses and Discharge

Checks, the Banking System, and E-Money

Creditor's and Debtor's Rights

Secured Transactions and Electronic Filing

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment,Worker Protection,and Immigration Laws

Labor Law and Collective Bargaining

Equal Opportunity in Employment

Limited Partnerships and Limited Liability Limited Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchises and Special Forms of Business

Investor Protection and Online Securities Transactions

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection and Global Warming

Antitrust Law and Unfair Trade Practices

Personal Property and Bailment

Real Property

Landlord Tenant Law and Land Use Regulation

Insurance

Accountants' Liability

Wills, Trusts, and Elder Law

Family Law

International and World Trade Law

Filters