ENT 2113- Ron Bolen Final Exam study Set (Spring 2022)

A business can obtain liability insurance, which helps protect the business against lawsuit judgments. - Answer-True Bonding is a type of insurance in which the business is covered in case the workers cause any damage in the performance of their work. - Answer-True In a Subchapter C Corporation, it is possible to have a double taxation situation. - Answer-True The insurance coverage obtained by a small business is directly proportional to the cost. As the coverage increases, the cost also increases. - Answer-True If a new business deals with toxic waste such as asbestos, it can expect to be subject to significant regulation, regardless of the size of the firm. - Answer-True Sea Waves Tours and Avis Travels enter into a formal agreement with each other. Under this agreement, over the next year, Sea Waves Tours will recommend Avis Travels to all its customers. Avis Travels will pay a small commission for every new customer they gain as a result of this recommendation. In this scenario, Sea Waves Tours and Avis Travels have - Answer-Signed a contract with each other Marsciva Technologies is an emerging business. The firm considers the owners to be employees of the firm and therefore pays them salaries and bonuses. To reduce corporate tax, the owners of Marsciva Technologies pay themselves nearly all the profits generated so that very little actual profits are reported by the firm. Based on these characteristics, Marsciva Technologies is most likely a - Answer-Subchapter C Corportation In the context of legal forms of business, a Subchapter S Corporation - Answer-allows the owners to treat the income of the firm as part of their personal incomes. In the context of legal forms of business, which of the following is an area in which sole proprietorships differ from general partnerships? - Answer-the possibility of bringing in new equity partners In the context of legal forms of business, identify a true statement about sole proprietorship firms. - Answer-Laws governing business practices do not recognize other equity investors, which limits the growth potential of such firms.