Question 1

In a ________, the voting stock is held by a small number of individuals and is very thinly or infrequently traded.

Accepted Answer

A)  public corporation 
B)  private corporation 
C)  narrow corporation 
D)  cautious public corporation 
E)  closely held corporation 
A)  public corporation 
B)  private corporation 
C)  narrow corporation 
D)  cautious public corporation 
E)  closely held corporation

Question 2

All of the following are advantages of a sole proprietorship except:

Accepted Answer

A)  creating one is easy and inexpensive 
B)  unlimited liability 
C)  it is not subject to double taxation 
D)  the owner maintains complete control of the business 
E)  business losses can be deducted against the sole proprietor's other sources of income 
A)  creating one is easy and inexpensive 
B)  unlimited liability 
C)  it is not subject to double taxation 
D)  the owner maintains complete control of the business 
E)  business losses can be deducted against the sole proprietor's other sources of income

Question 3

A subchapter S corporation combines the advantages of a partnership and a C corporation.

Accepted Answer

A) True 
 B)False

Question 4

________ is typically issued to conservative investors who have preferential rights over common stockholders in regard to dividends and to the assets of the corporation in the event of liquidation.

Accepted Answer

A)  Restricted stock 
B)  Partial stock 
C)  Preferred stock 
D)  Common stock 
E)  Limited liability stock 
A)  Restricted stock 
B)  Partial stock 
C)  Preferred stock 
D)  Common stock 
E)  Limited liability stock

Question 5

Which of the following statements is incorrect regarding common stock?

Accepted Answer

A)  Common stock is issued more narrowly than preferred stock. 
B)  The common stockholders have voting rights. 
C)  The common stockholders get paid after the creditors in the event of the liquidation of the corporation. 
D)  Common stock is the form of stock that most shareholders of a corporation own. 
E)  The common stockholders elect the board of directors. 
A)  Common stock is issued more narrowly than preferred stock. 
B)  The common stockholders have voting rights. 
C)  The common stockholders get paid after the creditors in the event of the liquidation of the corporation. 
D)  Common stock is the form of stock that most shareholders of a corporation own. 
E)  The common stockholders elect the board of directors.

Question 6

The most important thing that any entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization is to hire an aggressive attorney.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true regarding common stock and preferred stock?

Accepted Answer

A)  Preferred stock is rarely issued. 
B)  Common stock is rarely issued. 
C)  Common stock is issued more broadly than preferred stock. 
D)  Preferred stock is issued more broadly than common stock. 
E)  Common stock and preferred stock are issued in the same amount. 
A)  Preferred stock is rarely issued. 
B)  Common stock is rarely issued. 
C)  Common stock is issued more broadly than preferred stock. 
D)  Preferred stock is issued more broadly than common stock. 
E)  Common stock and preferred stock are issued in the same amount.

Question 8

Rachael James just took a job with IKEA. As part of her employment agreement, IKEA required Rachael to sign an agreement, which states that if she leaves IKEA, she will not work for a firm that competes against IKEA for at least two years. The agreement that Rachael signed is called a:

Accepted Answer

A)  nondisclosure agreement 
B)  nonparticipate agreement 
C)  nonchallenge agreement 
D)  noncompete agreement 
E)  noncontend agreement 
A)  nondisclosure agreement 
B)  nonparticipate agreement 
C)  nonchallenge agreement 
D)  noncompete agreement 
E)  noncontend agreement

Question 9

In which form of business ownership are the owners called "members"?

Accepted Answer

A)  general partnership 
B)  limited partnership 
C)  limited liability company 
D)  subchapter C corporation 
E)  C corporation 
A)  general partnership 
B)  limited partnership 
C)  limited liability company 
D)  subchapter C corporation 
E)  C corporation

Question 10

A ________ sets forth the rights and duties of the general partners and limited partners, along with the details of how the partnership will be managed and eventually dissolved.

Accepted Answer

A)  partnership accord 
B)  restricted partnership agreement 
C)  business partnership agreement 
D)  limited partnership concurrence 
E)  limited partnership agreement 
A)  partnership accord 
B)  restricted partnership agreement 
C)  business partnership agreement 
D)  limited partnership concurrence 
E)  limited partnership agreement

Question 11

A ________ combines the advantages of a partnership and a C corporation.

Accepted Answer

A)  subchapter S corporation 
B)  limited partnership 
C)  general partnership 
D)  sole proprietorship 
E)  subchapter K corporation 
A)  subchapter S corporation 
B)  limited partnership 
C)  general partnership 
D)  sole proprietorship 
E)  subchapter K corporation

Question 12

Large firms like 3M, Google, Oracle, and Microsoft, that trade on organized stock exchanges, are:

Accepted Answer

A)  limited partnerships 
B)  limited liability companies 
C)  subchapter S corporations 
D)  C corporations 
E)  general partnerships 
A)  limited partnerships 
B)  limited liability companies 
C)  subchapter S corporations 
D)  C corporations 
E)  general partnerships

Question 13

Which form of business ownership is a particularly poor choice for an aggressive entrepreneurial firm?

Accepted Answer

A)  C corporation 
B)  sole proprietorship 
C)  subchapter S corporation 
D)  limited partnership 
E)  limited liability corporation 
A)  C corporation 
B)  sole proprietorship 
C)  subchapter S corporation 
D)  limited partnership 
E)  limited liability corporation

Question 14

The single most important thing the founders of an entrepreneurial venture can do to avoid ethical misconduct is to establish a strong ethical culture for their firms.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is typically not included in the founders' agreement for a firm?

Accepted Answer

A)  marketing plan 
B)  legal form of business ownership 
C)  buyback clause 
D)  apportionment of stock 
E)  identity and proposed titles of the founders 
A)  marketing plan 
B)  legal form of business ownership 
C)  buyback clause 
D)  apportionment of stock 
E)  identity and proposed titles of the founders

In a ________, the voting stock is held by a small number of individuals and is very thinly or infrequently traded.

All of the following are advantages of a sole proprietorship except:

A subchapter S corporation combines the advantages of a partnership and a C corporation.

________ is typically issued to conservative investors who have preferential rights over common stockholders in regard to dividends and to the assets of the corporation in the event of liquidation.

Which of the following statements is incorrect regarding common stock?

The most important thing that any entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization is to hire an aggressive attorney.

Which of the following is true regarding common stock and preferred stock?

Rachael James just took a job with IKEA. As part of her employment agreement, IKEA required Rachael to sign an agreement, which states that if she leaves IKEA, she will not work for a firm that competes against IKEA for at least two years. The agreement that Rachael signed is called a:

In which form of business ownership are the owners called "members"?

A ________ sets forth the rights and duties of the general partners and limited partners, along with the details of how the partnership will be managed and eventually dissolved.

A ________ combines the advantages of a partnership and a C corporation.

Large firms like 3M, Google, Oracle, and Microsoft, that trade on organized stock exchanges, are:

Which form of business ownership is a particularly poor choice for an aggressive entrepreneurial firm?

The single most important thing the founders of an entrepreneurial venture can do to avoid ethical misconduct is to establish a strong ethical culture for their firms.

Which of the following is typically not included in the founders' agreement for a firm?

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Assessing a New Ventures Financial Strength and Viability

Building a New Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

Exam 7: Preparing the Proper Ethical and Legal Foundation

In a ________, the voting stock is held by a small number of individuals and is very thinly or infrequently traded.

All of the following are advantages of a sole proprietorship except:

A subchapter S corporation combines the advantages of a partnership and a C corporation.

________ is typically issued to conservative investors who have preferential rights over common stockholders in regard to dividends and to the assets of the corporation in the event of liquidation.

Which of the following statements is incorrect regarding common stock?

The most important thing that any entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization is to hire an aggressive attorney.

Which of the following is true regarding common stock and preferred stock?

Rachael James just took a job with IKEA. As part of her employment agreement, IKEA required Rachael to sign an agreement, which states that if she leaves IKEA, she will not work for a firm that competes against IKEA for at least two years. The agreement that Rachael signed is called a:

In which form of business ownership are the owners called "members"?

A ________ sets forth the rights and duties of the general partners and limited partners, along with the details of how the partnership will be managed and eventually dissolved.

A ________ combines the advantages of a partnership and a C corporation.

Large firms like 3M, Google, Oracle, and Microsoft, that trade on organized stock exchanges, are:

Which form of business ownership is a particularly poor choice for an aggressive entrepreneurial firm?

The single most important thing the founders of an entrepreneurial venture can do to avoid ethical misconduct is to establish a strong ethical culture for their firms.

Which of the following is typically not included in the founders' agreement for a firm?

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Assessing a New Ventures Financial Strength and Viability

Building a New Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters