Question 1

A sole proprietorship does not pay taxes at the business level.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is true of tort liability of a general partnership?

Accepted Answer

A)  Only the partner who committed the tort is liable. 
B)  Partners who have not committed the tort but had to pay liability cannot indemnify from the partner that committed the tort. 
C)  A partner can be sued even if he or she did not participate in the commission of the tort. 
D)  If one of the partners in the partnership is released, the other partners are discharged of liability. 
A)  Only the partner who committed the tort is liable. 
B)  Partners who have not committed the tort but had to pay liability cannot indemnify from the partner that committed the tort. 
C)  A partner can be sued even if he or she did not participate in the commission of the tort. 
D)  If one of the partners in the partnership is released, the other partners are discharged of liability.

Question 3

________ is a situation in which a partner withdraws from a partnership without having the right to do so at that time.

Accepted Answer

A)  Winding up 
B)  Indemnification 
C)  Wrongful dissolution 
D)  Proliferation 
A)  Winding up 
B)  Indemnification 
C)  Wrongful dissolution 
D)  Proliferation

Question 4

The right to share in the profits of the partnership is the right to share in the earnings from the investment of capital.

Accepted Answer

A) True 
 B)False

Question 5

A plaintiff must name the partnership and all of the partners as defendants in a lawsuit in order to pursue a claim for ________.

Accepted Answer

A)  multiple liability 
B)  joint liability 
C)  limited liability 
D)  unlimited personal liability 
A)  multiple liability 
B)  joint liability 
C)  limited liability 
D)  unlimited personal liability

Question 6

List and briefly explain the advantages and disadvantages of a sole proprietorship.

Accepted Answer

There are several major advantages to op

Question 7

The ________ requires general partners to adhere to the provisions of the partnership agreement and the decisions of the partnership.

Accepted Answer

A)  duty to inform 
B)  duty of loyalty 
C)  duty of care 
D)  duty of obedience 
A)  duty to inform 
B)  duty of loyalty 
C)  duty of care 
D)  duty of obedience

Question 8

An entrepreneur is a person who forms and operates a business.

Accepted Answer

A) True 
 B)False

Question 9

General partners are permitted to sue other partners for an accounting of the partnership.

Accepted Answer

A) True 
 B)False

Question 10

Self-dealing-although fully disclosed-is not permitted in a general partnership.

Accepted Answer

A) True 
 B)False

Question 11

A general partnership is valid only if it is carried out for profit.

Accepted Answer

A) True 
 B)False

Question 12

Instead of suing the partnerships or other partners at law, general partners are given the right to bring a(n) ________ against other partners.

Accepted Answer

A)  claim for damages 
B)  tort action 
C)  call for action 
D)  action for an accounting 
A)  claim for damages 
B)  tort action 
C)  call for action 
D)  action for an accounting

Question 13

The ________ is a model act that codifies general partnership law.

Accepted Answer

A)  Uniform Partnership Act (UP
A)  
B)  Fair Employment Partnership Act (FEP
A)  
C)  Americans with Disabilities Act (AD
A)  
D)  Age Discrimination in Employment Act (AED
A)  
A)  Uniform Partnership Act (UP
A)  
B)  Fair Employment Partnership Act (FEP
A)  
C)  Americans with Disabilities Act (AD
A)  
D)  Age Discrimination in Employment Act (AED
A)

Question 14

Why does a sole proprietorship not pay taxes at the business level?

Accepted Answer

A)  It is not a separate legal entity from the owner. 
B)  It is a small business that is exempted from taxation. 
C)  It is a not-for-profit organization. 
D)  It is generally an institution with no business dealings. 
A)  It is not a separate legal entity from the owner. 
B)  It is a small business that is exempted from taxation. 
C)  It is a not-for-profit organization. 
D)  It is generally an institution with no business dealings.

Question 15

The name selected by a general partnership cannot indicate that it is a corporation.

Accepted Answer

A) True 
 B)False

Question 16

All general partners have an equal right to participate in the management of the general partnership business unless otherwise specified in the general partnership agreement.

Accepted Answer

A) True 
 B)False

Question 17

The sole proprietor has ________ liability.

Accepted Answer

A)  zero personal 
B)  limited organizational 
C)  complete organizational 
D)  unlimited personal 
A)  zero personal 
B)  limited organizational 
C)  complete organizational 
D)  unlimited personal

Question 18

A ________ is the obligation partners owe to use the same level of care and skill that a reasonable person in the same position would use in the same circumstances.

Accepted Answer

A)  duty to perform 
B)  duty of care 
C)  duty to inform 
D)  duty of obedience 
A)  duty to perform 
B)  duty of care 
C)  duty to inform 
D)  duty of obedience

Question 19

A general partnership is an association of two or more persons to carry on as co-owners of a business for profit.

Accepted Answer

A) True 
 B)False

Question 20

General partners have unlimited personal liability for the debts and obligations of the partnership.

Accepted Answer

A) True 
 B)False

Exam 34: Small Business, Entrepreneurship, and General Partnerships

A sole proprietorship does not pay taxes at the business level.

Which of the following is true of tort liability of a general partnership?

________ is a situation in which a partner withdraws from a partnership without having the right to do so at that time.

The right to share in the profits of the partnership is the right to share in the earnings from the investment of capital.

A plaintiff must name the partnership and all of the partners as defendants in a lawsuit in order to pursue a claim for ________.

List and briefly explain the advantages and disadvantages of a sole proprietorship.

The ________ requires general partners to adhere to the provisions of the partnership agreement and the decisions of the partnership.

An entrepreneur is a person who forms and operates a business.

General partners are permitted to sue other partners for an accounting of the partnership.

Self-dealing-although fully disclosed-is not permitted in a general partnership.

A general partnership is valid only if it is carried out for profit.

Instead of suing the partnerships or other partners at law, general partners are given the right to bring a(n) ________ against other partners.

The ________ is a model act that codifies general partnership law.

Why does a sole proprietorship not pay taxes at the business level?

The name selected by a general partnership cannot indicate that it is a corporation.

All general partners have an equal right to participate in the management of the general partnership business unless otherwise specified in the general partnership agreement.

The sole proprietor has ________ liability.

A ________ is the obligation partners owe to use the same level of care and skill that a reasonable person in the same position would use in the same circumstances.

A general partnership is an association of two or more persons to carry on as co-owners of a business for profit.

General partners have unlimited personal liability for the debts and obligations of the partnership.

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