ENT 2113 Tested Set
Exam Questions With Reviewed
Correct Detailed Answers
New Update!!
1. Any business needs to acquire a license to do business in the county or city
where the firm will be operating.
a. true
b. false - ANSWER a. true
2. The Americans with Disabilities Act requires that there should be no
discrimination in the hiring, management, or dismissal of employees with
disabilities.
a. true
b. false - ANSWER a. true
3. The insurance coverage obtained by a small business is directly proportional to
the cost. As the coverage increases, the cost also increases.
a. true
b. false - ANSWER a. true
,4. A business that chooses to form a corporation must have a board of directors.
In new small corporations, the board of directors and shareholders must be
different individuals.
a. true
b. false - ANSWER a. true
5. In a Subchapter C Corporation, it is possible to have a double taxation
situation.
a. true
b. false - ANSWER a. true
6. Carla and John enter into a partnership and form a business. Under the
partnership agreement, Carla is directly responsible for the management of the
firm and its liabilities. John has a minor financial stake in the firm and works there,
but he is not held responsible for the taxes and debts owed by the firm. In the
context of the legal forms of business, Carla and John have formed a ________,
a. general partnership
b. Subchapter C Corporation
c. sole proprietorship
d. limited liability partnership - ANSWER d. limited liability partnership
7. 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
a. sole proprietorship
, b. limited partnership
c. Subchapter S Corporation
d. Subchapter C Corporation - ANSWER d. Subchapter C Corporation
8. In the context of legal forms of business, a general partner in a limited liability
partnership
a. is not responsible for liabilities owed if the firm goes bankrupt
b. has unlimited liability for any debts or judgments against the firm
c. is not active in the management of the firm
d. act as an independent external advisor to the firm - ANSWER b. has
unlimited liability for any debts or judgments against the firm
9. In the context of legal forms of business, identify a true statement about
limited liability partnership (LLP).
a. General partners in a limited liability partnership are indirectly responsible for
federal taxes owed by the firm.
b. Limited partners in a limited liability partnership must be external advisors who
do not have a stake in the ownership of the firm.
c. All partners in a limited liability partnership are jointly responsible for any debts
or judgments against the firm.
d. In a limited liability partnership, limited partners can work at the firm but not
be active in its management. - ANSWER d. In a limited liability partnership,
limited partners can work at the firm but not be active in its management.
10. James and Mary own a business. When they pay themselves an advance in
salary or a bonus, it is called a(n) ________.
a. cash out
Exam Questions With Reviewed
Correct Detailed Answers
New Update!!
1. Any business needs to acquire a license to do business in the county or city
where the firm will be operating.
a. true
b. false - ANSWER a. true
2. The Americans with Disabilities Act requires that there should be no
discrimination in the hiring, management, or dismissal of employees with
disabilities.
a. true
b. false - ANSWER a. true
3. The insurance coverage obtained by a small business is directly proportional to
the cost. As the coverage increases, the cost also increases.
a. true
b. false - ANSWER a. true
,4. A business that chooses to form a corporation must have a board of directors.
In new small corporations, the board of directors and shareholders must be
different individuals.
a. true
b. false - ANSWER a. true
5. In a Subchapter C Corporation, it is possible to have a double taxation
situation.
a. true
b. false - ANSWER a. true
6. Carla and John enter into a partnership and form a business. Under the
partnership agreement, Carla is directly responsible for the management of the
firm and its liabilities. John has a minor financial stake in the firm and works there,
but he is not held responsible for the taxes and debts owed by the firm. In the
context of the legal forms of business, Carla and John have formed a ________,
a. general partnership
b. Subchapter C Corporation
c. sole proprietorship
d. limited liability partnership - ANSWER d. limited liability partnership
7. 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
a. sole proprietorship
, b. limited partnership
c. Subchapter S Corporation
d. Subchapter C Corporation - ANSWER d. Subchapter C Corporation
8. In the context of legal forms of business, a general partner in a limited liability
partnership
a. is not responsible for liabilities owed if the firm goes bankrupt
b. has unlimited liability for any debts or judgments against the firm
c. is not active in the management of the firm
d. act as an independent external advisor to the firm - ANSWER b. has
unlimited liability for any debts or judgments against the firm
9. In the context of legal forms of business, identify a true statement about
limited liability partnership (LLP).
a. General partners in a limited liability partnership are indirectly responsible for
federal taxes owed by the firm.
b. Limited partners in a limited liability partnership must be external advisors who
do not have a stake in the ownership of the firm.
c. All partners in a limited liability partnership are jointly responsible for any debts
or judgments against the firm.
d. In a limited liability partnership, limited partners can work at the firm but not
be active in its management. - ANSWER d. In a limited liability partnership,
limited partners can work at the firm but not be active in its management.
10. James and Mary own a business. When they pay themselves an advance in
salary or a bonus, it is called a(n) ________.
a. cash out
