Question 1

In a limited partnership,limited partners:

Accepted Answer

A)  play an active role in the management of the firm.
B)  do not pay federal income tax on their share of the profits.
C)  are passive investors.
D)  have unlimited liability for the firm's debts.E) C) and D)
F) A) and D)

Question 2

A sole proprietorship is a legal entity separate from its owner.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not essential to the formation of a mining partnership?

Accepted Answer

A)  Joint operation of the property
B)  Joint ownership of a mineral interest
C)  Active physical participation in operations
D)  Sharing of profits and lossesE) B) and D)
F) B) and C)

Question 4

No formalities are required in order to establish a partnership.

Accepted Answer

A) True 
 B)False

Question 5

If a partnership leases a building that belongs to one of the partners,the property is said to be owned by the partnership.

Accepted Answer

A) True 
 B)False

Question 6

The sale of a partner's transferable interest in a business entitles the buyer to what rights?

Accepted Answer

A)  Distributions,like profit,that the selling partner was entitled to.
B)  The right to inspect the partnership's accounting books.
C)  The right to manage the partnership.
D)  The right to represent the partnership in a legal proceeding.E) A) and B)
F) All of the above

Question 7

A joint venture is a(n) :

Accepted Answer

A)  association limited to no more than two persons in business for profit.
B)  enterprise of numerous co-owners in a nonprofit undertaking.
C)  enterprise engaged in a single project.
D)  association of persons engaged as co-owners in a single undertaking for profit.E) All of the above
F) A) and C)

Question 8

Generally,professional shareholders are personally liable for the obligations of the professional corporation.

Accepted Answer

A) True 
 B)False

Question 9

As of December 2014,________ states plus the District of Columbia and the Virgin Islands have adopted the RUPA.

Accepted Answer

A)  37
B)  24
C)  50
D)  44E) A) and C)
F) A) and B)

Question 10

Which of the following statements about professional corporations is false?

Accepted Answer

A)  A professional corporation is formed only by a filing with the secretary of state.
B)  A professional corporation is managed by a board of directors,unless a statute provides otherwise.
C)  A professional corporation's shareholders have personal liability for the obligations of the professional corporation.
D)  A professional corporation's rigid management structure makes it inappropriate for some smaller professional practices.E) None of the above
F) A) and B)

Question 11

When a partnership is formed,partners contribute cash or other property to the partnership,this is called:

Accepted Answer

A)  partnership property.
B)  partnership liability.
C)  partnership cash flow.
D)  partnership capital.E) All of the above
F) A) and B)

Question 12

Which of the following statements about a partner's partnership interest is false?

Accepted Answer

A)  The RUPA gives ownership of partnership property to the partners.
B)  A partner's partnership interest includes his transferable interest.
C)  A partner has no individual ownership rights in partnership property.
D)  Partners have the right to use partnership property for partnership purposes.E) C) and D)
F) A) and D)

Question 13

The ________ is the preferred form of business for professionals and is especially good for consultants and auditors,allowing them management flexibility while insulating them mostly from personal liability.

Accepted Answer

A)  S Corporation
B)  LLLP
C)  LLC
D)  LLPE) A) and B)
F) B) and C)

Question 14

Which of the following is true about a sole proprietorship?

Accepted Answer

A)  A sole proprietorship is a legal entity.
B)  A sole proprietorship cannot sue or be sued.
C)  A sole proprietorship as form of business can be transferred to someone else.
D)  A sole proprietorship has a life of its own apart from its owner.E) All of the above
F) A) and D)

Question 15

Jane and Ridge are partners in a computer animation firm.Jane retires from the firm,but tells Ridge that he can leave her name on the entrance door to the firm and in the telephone listing.Alex,a new client,visits the firm after telephoning the firm.Alex has seen Jane's name listed in the phone book along with Ridge's and the firm's names.He also sees Jane's name on the entrance door to the firm.Believing Jane is a partner with Ridge,Alex contracts to have the firm develop animation for his upcoming film.Ridge,however,never performs the contract.Alex sues Ridge and Jane.Is Jane liable to Alex?

Accepted Answer

Yes.Jane and Ridge are purported partner...

Question 16

The charging-order creditor is a lien creditor and is entitled to receive only the partner's share of the partnership distributions.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is incorrect concerning a joint venture?

Accepted Answer

A)  Joint ventures are limited to single projects.
B)  Joint venturers are personally liable for its debts.
C)  Joint ventures are created much like partnerships.
D)  Joint venturers have more implied and apparent authority than do partners in a partnership.E) All of the above
F) C) and D)

Question 18

An order charging all or part of the partner's transferable partnership interest with payment of the unsatisfied amount of the judgment is called a(n) ________.

Accepted Answer

A)  interim charge
B)  redeeming order
C)  charging order
D)  redeeming the charge orderE) None of the above
F) A) and B)

Question 19

A(n) ________ arises when a person misleads a second person into believing that the first person is a partner of a third person.

Accepted Answer

A)  purported partnership
B)  actual partnership
C)  constructive partnership
D)  notice partnershipE) A) and B)
F) A) and D)

Question 20

A ________ is found when an arrangement is made not to establish an ongoing business involving many transactions,but is limited to a single project.

Accepted Answer

A)  corporation
B)  limited liability company
C)  partnership
D)  joint ventureE) B) and C)
F) All of the above

Exam 37: Introduction to Forms of Business and Formation of Partnerships

Which of the following is true about a sole proprietorship?

Correct Answer
verified

The ________ is the preferred form of business for professionals and is especially good for consultants and auditors,allowing them management flexibility while insulating them mostly from personal liability.

Correct Answer
verified

Which of the following statements about a partner's partnership interest is false?

Correct Answer
verified

In a limited partnership,limited partners:

Correct Answer
verified

The sale of a partner's transferable interest in a business entitles the buyer to what rights?

Correct Answer
verified

A(n) ________ arises when a person misleads a second person into believing that the first person is a partner of a third person.

Correct Answer
verified

No formalities are required in order to establish a partnership.

Correct Answer
verified

A sole proprietorship is a legal entity separate from its owner.

Correct Answer
verified

A ________ is found when an arrangement is made not to establish an ongoing business involving many transactions,but is limited to a single project.

Correct Answer
verified

As of December 2014,________ states plus the District of Columbia and the Virgin Islands have adopted the RUPA.

Correct Answer
verified

Correct Answer
verified
Yes.Jane and Ridge are purported partner...
View Answer

A joint venture is a(n) :

Correct Answer
verified

If a partnership leases a building that belongs to one of the partners,the property is said to be owned by the partnership.

Correct Answer
verified

Generally,professional shareholders are personally liable for the obligations of the professional corporation.

Correct Answer
verified

When a partnership is formed,partners contribute cash or other property to the partnership,this is called:

Correct Answer
verified

The charging-order creditor is a lien creditor and is entitled to receive only the partner's share of the partnership distributions.

Correct Answer
verified

An order charging all or part of the partner's transferable partnership interest with payment of the unsatisfied amount of the judgment is called a(n) ________.

Correct Answer
verified

Which of the following statements about professional corporations is false?

Correct Answer
verified

Which of the following is incorrect concerning a joint venture?

Correct Answer
verified

Which of the following is not essential to the formation of a mining partnership?

Correct Answer
verified

Exam 37: Introduction to Forms of Business and Formation of Partnerships

Which of the following is true about a sole proprietorship?

Correct AnswerverifiedShow Answer

The ________ is the preferred form of business for professionals and is especially good for consultants and auditors,allowing them management flexibility while insulating them mostly from personal liability.

Correct AnswerverifiedShow Answer

Which of the following statements about a partner's partnership interest is false?

Correct AnswerverifiedShow Answer

In a limited partnership,limited partners:

Correct AnswerverifiedShow Answer

The sale of a partner's transferable interest in a business entitles the buyer to what rights?

Correct AnswerverifiedShow Answer

A(n) ________ arises when a person misleads a second person into believing that the first person is a partner of a third person.

Correct AnswerverifiedShow Answer

No formalities are required in order to establish a partnership.

Correct AnswerverifiedShow Answer

A sole proprietorship is a legal entity separate from its owner.

Correct AnswerverifiedShow Answer

A ________ is found when an arrangement is made not to establish an ongoing business involving many transactions,but is limited to a single project.

Correct AnswerverifiedShow Answer

As of December 2014,________ states plus the District of Columbia and the Virgin Islands have adopted the RUPA.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedYes.Jane and Ridge are purported partner...View AnswerShow Answer

A joint venture is a(n) :

Correct AnswerverifiedShow Answer

If a partnership leases a building that belongs to one of the partners,the property is said to be owned by the partnership.

Correct AnswerverifiedShow Answer

Generally,professional shareholders are personally liable for the obligations of the professional corporation.

Correct AnswerverifiedShow Answer

When a partnership is formed,partners contribute cash or other property to the partnership,this is called:

Correct AnswerverifiedShow Answer

The charging-order creditor is a lien creditor and is entitled to receive only the partner's share of the partnership distributions.

Correct AnswerverifiedShow Answer

An order charging all or part of the partner's transferable partnership interest with payment of the unsatisfied amount of the judgment is called a(n) ________.

Correct AnswerverifiedShow Answer

Which of the following statements about professional corporations is false?

Correct AnswerverifiedShow Answer

Which of the following is incorrect concerning a joint venture?

Correct AnswerverifiedShow Answer

Which of the following is not essential to the formation of a mining partnership?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Yes.Jane and Ridge are purported partner...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified