Business Its Legal, Ethical, and Global Environment: Chapter 18. All Answers - $8.49   Add to cart

Exam (elaborations)

Business Its Legal, Ethical, and Global Environment: Chapter 18. All Answers

Business Its Legal, Ethical, and Global Environment: Chapter 18 1. There are no formal requirements for forming a sole proprietorship. a. b. : 1 Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Sole Proprietorships Bloom's: Knowledge 2. The sole proprietor's personal assets are subject to business creditor attachment. a. b. : 1 Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Sole Proprietorships Bloom's: Knowledge 3. The income of the sole proprietor's business is reported as a separate entity's income. a. b. : 1 Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Sole Proprietorships Bloom's: Knowledge 4. Partners by implication cannot share profits. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 5. A partnership can only be formed voluntarily. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 6. Sharing of profits is prima facie evidence that a partnership exists. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 7. A partnership by estoppel arises when actions lead a third party to believe a partnership exists. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 8. The sale of the goodwill of a partnership requires unanimous consent. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 9. Partners' personal assets can be reached by partnership creditors. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 10. Partners are mutual principals and agents. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 11. Partners are not liable for each others' torts committed in the scope of business. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 12. A tenancy in partnership does not carry rights of survivorship. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 13. A partner's interest in a partnership is not transferable. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 14. A partnership must file a separate tax return and pay taxes on its income. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 15. Dissolution of a partnership is termination of a partnership. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 16. In a limited partnership, there must be a least one general partner. a. b. : 1 Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Knowledge 17. Limited partners have liability limited to the amount of their contribution to the partnership. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Comprehension 18. Only the general partner in a limited partnership has personal liability. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Comprehension 19. Limited partners can take a management role and remain limited partners. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Comprehension 20. A limited partnership can exist by implication. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Comprehension 21. Limited partnerships are taxed the same way as general partnerships. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Comprehension 22. A corporation is only a domestic corporation in its state of incorporation. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 23. Oil company executives are the highest paid CEOs annually. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 24. The articles of incorporation must include the capital stock structure of the corporation. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 25. The statutory agent is the party who will be served with lawsuits against the corporation. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 26. An S corporation is created as an LLC. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 27. Incorporators are not liable for contracts entered into before incorporation. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 28. Novation and ratification have the same effect on promoters' pre-incorporation contracts. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 29. Bylaws provide the requirements for meetings and voting. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 30. The corporate veil can be pierced for inadequate capitalization. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 31. Watered shares are shares for which the purchaser did pay more than par but less than full market value. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Comprehension 32. Directors are personally liable for errors in business judgment. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Comprehension 33. The corporate opportunity doctrine requires directors to first present related business opportunities to the corporation. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Comprehension 34. Boards cannot rely on outside experts in decision making. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Comprehension 35. In 2012, the highest paid CEO was paid slightly more than $96 million in compensation. a. b. : 1 Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 36. Any shareholder can demand access to the corporate books and records. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 37. A proxy is valid only for 11 months. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 38. A copy of the voting trust must be on file in the corporate records. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 39. Stock transfer restrictions are void. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 40. Partners are only jointly liable for torts of other partners committed in the scope of the partnership business. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Comprehension 41. Limited partners who act as guarantors for partnership notes lose their limited partner status. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Knowledge 42. A merger requires a board resolution and shareholder approval. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 43. Appraisal rights are given only to dissenting shareholders. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 44. Limited partners can consult and advise with the general partner and still retain limited liability. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Knowledge 45. Limited partners' profits and losses are allocated equally. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Knowledge 46. An assignment of a limited partner's interest terminates the limited partnership. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Knowledge 47. Upon termination of both limited and general partnerships, outside creditors have first priority in terms of asset distribution. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Limited Partnerships Bloom's: Knowledge 48. Close corporations have less formality in their operational requirements. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 49. Subchapter S or S Corporation shareholders have personal liability for corporate debts. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 50. An inadequately capitalized corporation can have its corporate veil pierced. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 51. It is fraud to form a corporation to avoid personal liability. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 52. Members of limited liability companies have no right to vote on who should manage their companies. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Companies Bloom's: Knowledge 53. Owners of limited liability companies enjoy flow-through treatment of income and losses. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Companies Bloom's: Knowledge 54. Limited liability companies are peculiar to the United States. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Companies Bloom's: Knowledge 55. New members are admitted to an LLC only with approval by a majority of existing members. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Companies Bloom's: Knowledge 56. A limited liability company can be created informally. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Companies Bloom's: Knowledge 57. “Say on pay” gets its name from stakeholders getting to vote on executive compensation. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 58. A LLP can be created by implication. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Partnerships Bloom's: Knowledge 59. All owners in an LLP have limited liability. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Partnerships Bloom's: Knowledge 60. A limited liability company can be created informally. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Companies Bloom's: Knowledge 61. Limited liability companies, limited liability partnerships, limited partnerships, general partnerships, sole proprietorships and S corporations all have flow-through income and loss provisions for tax purposes. a. b. : 1 Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Sole Proprietorships Partnerships Limited Partnerships Corporations Limited Liability Companies Limited Liability Partnerships Bloom's: Application 62. Limited partnership interests are generally not transferable. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Knowledge 63. The corporate veil liability theory has been applied in situations that involve environmental clean-up issues. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 64. Parent corporations can never be held liable for the environmental clean-up costs of subsidiaries. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 65. Corporations pay double taxes, on income and shareholders on dividends. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 66. Shareholders generally elect the officers of the corporation. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 67. Pooling agreements are the same as voting trusts. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 68. LLCs have existed in Europe and South America prior to their existence in the U.S. a. b. : 1 Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Companies Bloom's: Knowledge 69. Under Sarbanes-Oxley, loans to corporate officers are prohibited. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 70. Under Sarbanes-Oxley, codes of ethics must cover financial reporting standards. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 71. Lawyers for corporations are not required to reveal investigations of misconduct in the corporation to the CEO. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 72. Lawyers for corporations are required to report misconduct by the corporation to the SEC after they have exhausted all means for an internal correction. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 73. Under Sarbanes-Oxley, the majority of members of the audit committee must be independent directors. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 74. Close corporations are generally publicly traded. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 75. Piercing the corporate veil has been used for purposes of imposing CERCLA liability. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 76. AIG was not involved in the subprime mortgage debacle. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 77. If members of a limited liability company exercise management authority, they lose their limited liability. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Companies Bloom's: Knowledge 78. Under Sarbanes-Oxley, current employees are not considered independent for purposes of board structure. a. b. : 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 79. Which of the following is of a sole proprietorship? a. A separate tax return must be filed. b. It is not a business entity. c. There is no personal liability for the owner. d. none of the above : b 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Sole Proprietorships Bloom's: Knowledge 80. Which of the following is not a method for forming a partnership? a. by agreement b. by estoppel c. by implication d. by transfer : d 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Knowledge 81. Evidence of sharing profits is prima facie evidence of partnership existence unless the profits are: a. wages or rent. b. not shared equally. c. income. d. all of the above : a 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Knowledge 82. A partnership by estoppel: a. is the same as a partnership by implication. b. results when third parties are led to believe a partnership exists. c. is the same as a joint venture. d. none of the above : b 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Knowledge 83. Partners' personal assets: a. cannot be reached by partnership creditors. b. cannot be reached by partnership creditors unless partnership assets are exhausted. c. can only be reached by personal creditors. d. none of the above : b 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Knowledge 84. In 2012, the CEO with the highest compensation was: a. Lawrence Ellison b. Mark Hurd c. John Donahoe d. none of the above : a 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 85. Unanimous consent of the partners is required for: a. confession of a judgment. b. borrowing money in a trading partnership. c. signing checks. d. none of the above : a 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Knowledge 86. Partnership property: a. is always personal property. b. is owned by the partners as tenants in partnership. c. can be pledged to a partner's personal creditor. d. all of the above : b 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Knowledge 87. A, B, and C are partners in a real estate firm. B has just died. B's widow: a. owns one-third of all the partnership land. b. is a tenant in partnership with A and C. c. can force the sale of the partnership property. d. none of the above : d 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Partnerships Bloom's: Application 88. A partner's interest: a. is the same as the partnership property. b. cannot be attached by creditors. c. cannot be transferred. d. none of the above. : d 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Knowledge 89. Transfer of a partner's interest: a. is void. b. results in dissolution of the partnership. c. relieves the partner of liability. d. makes the transferee a partner. e. none of the above : b 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Knowledge 90. For income tax purposes, a partnership: a. files a return and pays taxes. b. is an entity. c. has no taxes. d. none of the above : c 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Knowledge 91. Dissolution: a. is the same as termination. b. can result from a limited partner leaving the partnership. c. can result from the death of a partner. d. all of the above : c 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Knowledge 92. A limited partnership: a. requires at least one general partner. b. can be created by implication. c. must be run by the limited partners. d. all of the above : a 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Knowledge 93. Which of the following is not required for the certificate of limited partnership (under RULPA)? a. names of the limited partners b. capital contributions of the partners c. the profit-sharing arrangement d. None of the above are required. : d 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Knowledge 94. Limited partners have liability: a. for the full amount of partnership debts. b. only for the amount of their contribution. c. for the negligent acts of the general partner. d. none of the above : b 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Knowledge 95. Limited partners: a. can use their name in the partnership name. b. can contribute management services to the partnership. c. cannot advise the general partner. d. none of the above : d 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Limited Partnerships Bloom's: Application 96. The assignment of limited partnership interests: a. is prohibited by the ULPA. b. may be a sale of securities subject to federal regulation. c. is liberally permitted under the Internal Revenue Code. d. none of the above : b 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Knowledge 97. Which is the proper order for distribution of assets upon dissolution of a limited partnership? a. outside creditors; distributions owed to partners; capital contributions; remainder split according to distribution agreement b. outside creditors; limited partners' profits; limited partners' capital; general partners' advances; general partners' profit; general partners' capital c. limited partners' capital; outside creditors; limited partners' advances; general partners' capital and profits d. none of the above : a 1 Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Knowledge 98. Which of the following is not required for the articles of incorporation? a. names of incorporators b. capital stock structure c. names of board members d. All of the above are required. : c 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 99. In a novation by the board of a pre-incorporation contract involving the corporation, the promoter, and a third party: a. the corporation is released from liability. b. the promoter is released from liability. c. the promoter is made secondarily liable. d. none of the above : b 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 100. In a ratification by the board of a pre-incorporation contract involving the corporation, the promoter, and a third party: a. the corporation is released from liability. b. the promoter is released from liability. c. the promoter is made secondarily liable. d. none of the above : c 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 101. The corporate veil can be pierced when: a. there is only one shareholder in the corporation. b. the corporation was formed to avoid personal liability. c. the corporation has only preferred stock. d. none of the above : d 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 102. Watered shares result: a. when a purchaser does not pay full market value for the shares. b. when a purchaser does pay more than par value for the shares. c. in personal liability for the shareholders. d. none of the above : c 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 103. The business judgment rule holds directors liable for: a. errors in business judgment. b. their mistakes. c. failure to obtain necessary information for making decisions. d. none of the above : c 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 104. A director who usurps a corporate opportunity: a. will owe his/her corporation the profits from the opportunity. b. will not owe the profits to the corporation so long as the venture was disclosed in advance. c. has violated the business judgment rule. d. none of the above : a 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 105. Which of the following shareholders would qualify for access to the corporate books and records? a. a shareholder who owns 5 percent of any class of stock b. a shareholder who owns 5 percent of all the outstanding stock of a corporation c. a shareholder who has owned stock for six months d. All of the above shareholders qualify. : d 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Application 106. A shareholder proxy is: a. good until revoked. b. not subject to any securities laws. c. a transfer of a right to vote. d. none of the above : c 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 107. Transfer restrictions: a. must be noted on the stock to be valid. b. are generally valid only in family-owned corporations. c. cannot be used to satisfy SEC restrictions. d. none of the above : a 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 108. A corporate dissolution: a. cannot result from an agreement. b. results when a corporation does not hold an annual meeting. c. can begin with a board resolution. d. none of the above : c 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 109. A Subchapter S or S Corporation is: a. a special class of close corporation under the MBCA. b. an IRS tax treatment option for corporations owned by a limited number of shareholders. c. a not-for-profit corporation. d. none of the above : b 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Application 110. Hank Greenberg was the head of: a. the SEC. b. Citigroup. c. AIG. d. BP. : c 1 Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 111. Which of the following cannot be used to pierce the corporate veil? a. inadequate capitalization b. alter ego theory c. formation of the corporation to avoid personal liability d. All of the above theories can be used. : c 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Application 112. Which of the following activities will cause a limited partner to lose his limited liability status? a. being employed by the general partner as an employee b. managing the firm with the general partner c. consulting with or advising the general partner d. All of the above will result in the loss of limited liability status. : b 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Partnerships Bloom's: Application 113. When shareholders get to vote on executive compensation it is referred to as what? a. Pay-to-play b. Say-on-pay c. Day-of-pay d. Play-on-payday : b 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Application 114. Pooling agreements are: a. illegal as against public policy. b. the same as voting trusts. c. valid if filed with the corporation's secretary. d. none of the above : d 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Application 115. A limited liability company: a. can be created informally. b. does not have the pass-through feature of income and losses. c. is exclusive to the United States. d. none of the above : d 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Companies Bloom's: Knowledge 116. Owners of a limited liability company: a. have unlimited liability for contracts entered into by the LLC. b. can transfer their membership as a personal property interest. c. cannot assume any management responsibilities. d. all of the above : b 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Companies Bloom's: Knowledge 117. Which of the following forms of business organizations does not have the pass-through feature of income and losses? a. partnership b. limited partnership c. S corporation d. corporation : d 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 118. A joint venture: a. is a partnership limited in scope. b. is a limited liability company. c. must be incorporated to be recognized. d. none of the above : a 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : International Issues in Business Structure Bloom's: Knowledge 119. What conduct will cost a limited partner his/her limited liability status? a. engaging in the management of the business b. allowing his/her name to be used in the business name c. failure to file the limited partnership agreement d. All of the above will result in a loss of limited liability status. : d 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Limited Partnerships Bloom's: Application 120. A limited liability partnership (LLP): a. is a statutory creature. b. is the same as a limited partnership. c. is the same as a LLC. d. all of the above : a 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Partnerships Bloom's: Knowledge 121. Which of the following forms of business structure provides limited liability for the personal assets of the owners? a. sole proprietorship b. general partnership c. LLC d. partnership by implication e. All of the above provide limited liability. : c 1 Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Limited Liability Companies Bloom's: Knowledge 122. The directors of Kmart, Inc. voted several years ago to approve a new marketing plan that involved endorsements by Martha Stewart of Kmart home products such as linens, paint and decorations. Marketing studies have shown that Martha Stewart was not the right match for endorsements for Kmart's customer base. Kmart is now in Chapter 11 bankruptcy. Its shareholders believe the Martha Stewart decision was the cause of the company's demise. a. The shareholders have a cause of action against the directors for violation of the business judgment rule. b. The shareholders have a cause of action against the directors for violation of the corporate opportunity doctrine. c. The shareholders can have the court order the directors removed for cause. d. The directors of Kmart are protected under the business judgment rule. e. none of the above : d 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Application 123. In which of the following forms of doing business does the death of one of the owners cause dissolution? a. partnership b. S Corporation c. C Corporation d. closely-held corporation e. nonprofit corporation : a 1 Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Partnerships Bloom's: Knowledge 124. Which of the following is a requirement under Sarbanes-Oxley? a. The majority of the board of directors must be independent. b. No inside officers can serve on the board of directors. c. Lawyers must blow the whistle on their corporate clients engaged in fraud. d. all of the above : a 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 125. A corporation is said to have double taxation. What is meant by this statement? a. The corporation pays double the tax rate of individuals. b. The corporation pays taxes on its income and its shareholders pay taxes on their dividends from the corporation. c. both a and b d. none of the above : b 1 Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 126. Which of the following forms of business structure has the easiest means of transfer of ownership interests? a. LLCs b. LLPs c. Subchapter S corporations d. C corporations : d 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 127. Jim Braun has been a partner in a real estate investment partnership with Alicia Kaynes for 10 years. When the real estate market took a downward turn, one of their investments in a strip mall became a cash drain. Jim refused to contribute any more cash and withdrew from the partnership. Alicia was left to manage the property. Before she could sell it, Alicia had put in $125,000 into the strip mall property. Following the sale, Alicia demanded one-half of the $125,000 from Jim. Jim said he is not liable because he left the partnership. a. Jim is correct; he withdrew and his liability ended. b. Alicia is correct; Jim owes her his share of what she paid. c. Neither is correct; how much Jim owes depends on when he withdrew. d. none of the above : b 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Partnerships Bloom's: Application 128. Grace Owen formed a corporation with three of her friends for purposes of operating a catering company. Grace used her own checking account to deposit the client payments and to make distributions of the corporation’s profits to her three friends, who together owned 50% of the shares, with Grace owning the remainder of the shares. Grace promised her friends “no meetings, no formalities, we’ll just run the catering business.” Several wedding guests at a reception Grace’s company catered became ill. Grace had not purchased insurance. The guests brought suit to recover their medical bills and other damages from Grace and her three friends. Grace says she has no personal liability for the bad food that resulted in their illness. a. Grace is correct; their suit should be against the corporation. b. Grace is incorrect because of the veil and alter ego theory. c. Grace is liable, but her friends are not. d. none of the above : b 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Application 129. Under Sarbanes-Oxley, which of the following is ? a. Companies must have a separate code of ethics for financial reporting. b. Boards of directors are not subject to the act’s provisions. c. The act does not cover publicly traded companies. d. both b and c : a 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Application 130. The CEO of Citigroup announced a $8 billion write-down for the company because of bad loans. This announcement followed a previous announcement of a $5 billion write-down three quarters earlier. The board asked him to step down. a. The board does not have the authority to remove a CEO. b. The shareholders must approve the removal of a CEO. c. The CEO is elected by the shareholders. d. none of the above : d 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Application 131. Allied Van Lines has structured its company by giving its franchisees stock ownership in the company. On the stock is the following language: NOTE: Restrictions apply to ownership of this stock. Only franchisees and employees of Allied Van Lines can own this stock. In the event of a franchise or employment termination, the stock must first be offered to the Allied Board for purchase. Is the restriction valid? : Yes, the restriction is probably valid: (1) it is noted on the stock; (2) it is for the purpose of keeping ownership in the company; (3) it is reasonable - shares are offered to the board. 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Application 132. ABC partnership owns and operates a potato farm in Idaho. A, B, and C are the partners/owners. C is having significant personal financial problems. Savoy Stores has obtained a judgment against C in the amount of $l2,341. Savoy knows that ABC is about to harvest its potatoes. When the ABC potatoes are being transported for processing, Savoy takes one-third of the potatoes to satisfy the debt. A and B object. C claims he is using the partnership property to satisfy a debt. Can C do this? : No. Creditors can attach the partner's interest but not the partnership property. Savoy could attach C's profits from the potatoes but not the potatoes themselves. 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Partnerships Bloom's: Application 133. Alan Freeman is in the process of forming a corporation in order to protect himself from liability in the operation of his construction/development business. The business is incorporated on November 1, 1986. However, Alan was anxious to get started on a townhouse development. He signed contracts with subcontractors for the project during September and October. Discuss Alan's liability before and after incorporation. : Alan is personally liable on the contracts before and after incorporation. He can be relieved if the incorporation, the subs, and he enter into a novation. He will be secondarily liable if the corporation ratifies the contract. 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Application 134. Utah Light, Inc. has a takeover offer from Cal Corp. Utah Light is experiencing difficulty with earnings and its share price has dropped from $32 to $19. Cal Corp's offer is for $23 per share. Utah Light's board feels that because of pending plans and developing assets, it should not accept the offer. Must the board accept the offer? : No, the case is a classic illustration of the business judgment rule. The decision is supportable even though others may disagree - the directors are protected. 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Application 135. Discuss investors’ concerns regarding CEO compensation. : The main concerns are the following: increased compensation when company performance and value are down; lack of independent oversight; shareholder votes are not binding on the board; decreased shareholder frustration; and, current say-on-pay companies seem to have reasonable results from it. 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 136. Discuss CEO concerns regarding CEO compensation. : The main concerns are the following: micromanaging by the shareholders; lack of shareholder sophistication; creation of a talent pool drain to non-United States companies; creation of another reason to take a company private; and, say-on-pay does not promote a management-shareholder dialogue. 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 137. Draw a chart comparing the formation, liability, taxation, and management of partnerships, limited partnerships, corporations, and limited liability companies. : Use the chart on page 587 of the text as the key. 1 Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Partnerships Limited Partnerships Limited Liability Companies Bloom's: Comprehension 138. American Homes has just waged a successful takeover of Pioneer Homes. There are several minority shareholders of Pioneer who strongly objected to the merger due to the potential of Pioneer and that their earnings would be far greater once Pioneer was out of its cash crunch. What rights do these minority shareholders have? : There is little the minority shareholders can do except to voice their objection, vote against the takeover or merger, and insist upon their payment rights for their shares. In the case of a voted-upon takeover, the majority wins regardless of the long-term wisdom of that vote. 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Application 139. Explain when a shareholder has a right to see the books and records of a corporation. : A shareholder has the right to see the books and records of a corporation if he, she or it owns 5% of the outstanding shares of the corporation and has a proper business purpose. Also, a shareholder has the right to see the books and records of a corporation once he, she or it has owned the shares for 6 months and has a proper purpose. 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 140. List the provisions of Sarbanes-Oxley that affect corporation governance. : The act has provisions on the structure of the board, particularly independent directors and their role. The act also requires a code of ethics on financial issues. The act prohibits loans to officers. The act requires up-the-ladder reporting by auditors and lawyers. 1 Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal : Corporations Bloom's: Knowledge 141. Roche Holding and AstraZeneca have agreed to work together to share research data and fund joint research projects so that they can speed up the process for getting approved drugs to the market. Which of the following best describes the relationship between these two corporations? a. They are a partnership with full liability for the work that they do. b. They have merged. c. They have created a joint venture. d. There is no legal business structure here. : c 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : International Issues in Business Structure Bloom's: Synthesis 142. American Greetings, a family-owned corporation, wished to take the company private, and the family shareholders made an offer to purchase the shares of all non-family members. The family owns 10% of the company’s shares, but has 50% of the voting power. The board refused to approve the offer for the shares because the price was too low. Which of the following is correct? a. The approval of the board is not required for the family purchase of shares. b. The board’s failure to approve the transaction means that the acquisition cannot be done without dissenting shareholders. c. The approval of the board cannot be obtained until the family uses its votes to restructure the board with directors friendly to its proposal. d. Those with a minority interest cannot acquire other shares. : b 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Synthesis 143. The shareholders of Beazer Homes USA filed suit against the directors for the compensation plan that the Board approved for officers that provided the officers with bonuses despite the losses the company experienced and the continuing declines in sales of homes. Which of the following is correct about the suit? a. Shareholders are not permitted to sue their own directors. b. Absent fraud or illegality, the shareholders have no rights against the directors. c. The shareholders will need to establish a violation of the business judgment rule. d. Unless the shareholders were harmed directly, they have no right to bring suit or recover. : c 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Synthesis 144. Several retirement funds that own shares in News Corp., Inc., have filed suit against Rupert Murdoch, the chairman of the board and CEO of News Corp., alleging that Mr. Murdoch had the board approve the purchase of his daughter’s company for $675 million. Part of the purchase deal included putting Murdoch’s daughter on the News Corp. board. Which would be the best theory for recovery by the retirement funds? a. Insider trading b. Violation of the corporate opportunity doctrine c. Violation of the business judgment rule d. Breach of fiduciary duty : c 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Synthesis 145. Ann Archer purchased shares from XYZ Corp. for $10. The par value of the shares is $5. What is the amount of water per share in the shares? a. $0 b. $5 c. $10 d. $1 : a 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Corporations Bloom's: Synthesis 146. John Bloomberg and Erick Ashman have been working together to earn money by doing yard work in residential areas. John collects the payments and has purchased the equipment the two use, including a lawn mower, edger, and trimmers. After deducting expenses for gasoline, repairs, and insurance, John gives one-half of the net to Erick. The two have no agreement about their relationship. Which of the following is correct? a. John and Erick have a general partnership. b. John and Erick have a limited partnership. c. John and Erick have a joint venture. d. John and Erick have no business structure because they have no agreement. : a 1 Challenging : United States - BUSPROG: Reflective Thinking: Re - BUSPROG: Reflective Thinking : United States - OH - AICPA: BB-Critical Thinking : Partnerships Bloom's: Synthesis

Preview 4 out of 39  pages

browsegradesdotcom

Also available in bundle (1)

Business Its Legal, Ethical, and Global Environment: Chapter1- Chapter 21

$ 198.78   $ 36.49 22 items
  • 1. Exam (elaborations) - Business its legal, ethical, and global environment: chapter 21. all answers
  • 2. Exam (elaborations) - &tab;business its legal, ethical, and global environment: chapter 20. all answers
  • 3. Exam (elaborations) - &tab;business its legal, ethical, and global environment: chapter 20. all answers
  • 4. Exam (elaborations) - Business its legal, ethical, and global environment: chapter 19. all answers
  • 5. Exam (elaborations) - Business its legal, ethical, and global environment: chapter 18. all answers
  • Show more

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 450,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

$ 8.49
  • (0)
  Add to cart