CLA Quiz Questions and Answers ,100% CORRECT

CLA Quiz Questions and Answers The most common form of business organization is: - Correct Answersole proprietorship. General partnerships are goverened by the: - Correct AnswerUnivorm Partnership Act. A de facto corporation is: - Correct Answernot a corporation at all because of failure to comply with oganizational requirements. The owners of equity securities are called: - Correct Answershareholders or stockholders. The articles of incorporation may provide that shares of a given class can be converted into shares of another class on some predetermined ratio. These are known as: - Correct Answerconvertible shares. Preemptive rights are exercised when a shareholder has the right: - Correct Answerto purchase a proportionate share of a new issue of common stock before it is offered for sale to others. Before or while the corporation is being organized, a method for acquiring inestment capital is through - Correct Answerstock subscriptions A limited partner - Correct Answerhas no liability for debts or loss beyond his or her investement contribution. A joint venture is: - Correct Answertwo or more individuals mergin efforts for one event only. A written proxy - Correct Answermay grant general authority to vote on all matters at a stockholders' meeting. TRUE - Correct AnswerS corporations have forty shareholders. TRUE - Correct Answerdouble taxation occurs when corporate profits are taxed at corporate rates, distributions are made to the shareholders as dividens, and the dividens are taxed again to the shareholders at the individual income tax rate. FALSE - Correct AnswerNoncumulatie preferred stock receives dividens for all years before dividens are paid to common stockhodlers. TRUE - Correct AnswerStock splits reduce the price per share. TRUE - Correct AnswerA promoter is one who develops a business idea, arranges for capital, and acquires assets for the corporation before the corporation is actually organized. TRUE - Correct Answera limited liablity company is a hybrid of a corporation and a partnership. TRUE - Correct AnswerOne advantage of sole proprietorship is having the provifs taxed at individual tax rates. TRUE - Correct Answera general partnership must have as one of its business purposes the intention to generate profit. FALSE - Correct Answera general partnership must file a partnership income tax return and pay its own tax separately. Treasury Stock - Correct Answerhas not voting rights. Sally owns 500 shares of Fix-it corporation. At the annual shareholders' meeting, five directors are to be elected. If sally wishes to exercise her cumulative voting rights, what is the largest number of votes she can case for any one director? - Correct Answer2,500 Daffy and Bugs form a partership. Daffy contributes $20,000 to the partnership and Bugs contributes 30,000 pounds of carrots having a value of $10,000. At year's end, there is a profit of $15,000. No agreement was amde between the parties for distribution of the profits. How much will each partner receive? - Correct AnswerBoth get the same amount. Bugs, Elmer Fudd, and Porky form a limited partnership called Carrots and Spuds. A limite dPartnership Bugs is the general partner and Elmer and Porky are limited partners. Elmer becomes disenchanted with Bug's managerial skill because of his laid-back attitutde. Toting his shotgun on his shoulder. Elmer stomps his way to headquarters. Upon his arrival, he announces his presence with an authoritative knock. When Bugs opens the door, Elmer enters, pushing Bugs aside. At that point, Elmer declares through the sites of his trusty shotgun. Th-th-this is a management takeover. Sstep aside, Wabbit! Under the Uniform Limited Partership Act, Elmer cannot become the new general partner under the existing agreement because... - Correct Answerlimited partners may not participate in the management or control of the business, with or without a gun. Because of the altercation with Elmer, Bugs decides to leave Carrots and Spuds. A limited partnership to look for employment where he will be appraciated. There are no provisions for a successor general partner in the limited partnership agreement. Porky refuses to continue the business with Elmer even through Elmer is willing to take on the responsibilities of general partner, but now there are no partners. What will become of the limited partnership? - Correct AnswerThe partnership will dissolve because of the withdrawal of the general partner.