BUS 110 exam 2 2026 Questions and
Answers
3 major forms of business - Correct answer-sole proprietorship, partnership,
corporation
Sole Proprietorship - Correct answer-business that is owned, and usually managed
by one person with unlimited liability for debts and damages incurred by the
business
partnership - Correct answer-a legal form of business with 2 or more owners
corporation - Correct answer-a legal entity with authority to act and have liability
separate from its owners
unlimited liability - Correct answer-the responsibility of the business owners for all
the debts and damages incurred by the business
limited liability - Correct answer-the responsibility of a business owner for losses
only up to the amount they invest in the business
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, general partner - Correct answer-an owner (partner) who has unlimited liability and
is active in managing the firm
limited partner - Correct answer-an owner who invests money in the business but
doesn't have any management responsibility or liability for losses beyond his or her
investment
general partnership - Correct answer-a partnership in which all owners share in
operating the business and in assuming unlimited liability for debts and damages
incurred by the business
limited partnership - Correct answer-a partnership with one or more general
partners and one or more limited partners
limited liability partnership - Correct answer-a partnership that limits all partners'
risk of losing their personal assets to only their own acts or omissions and those of
people under their supervision. advantage is that partners are not responsible for
acts or omissions of other partners
conventional corporation (type C) - Correct answer-state chartered legal entity with
authority to act and have liability separate from its owners. subject to double
taxation
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Answers
3 major forms of business - Correct answer-sole proprietorship, partnership,
corporation
Sole Proprietorship - Correct answer-business that is owned, and usually managed
by one person with unlimited liability for debts and damages incurred by the
business
partnership - Correct answer-a legal form of business with 2 or more owners
corporation - Correct answer-a legal entity with authority to act and have liability
separate from its owners
unlimited liability - Correct answer-the responsibility of the business owners for all
the debts and damages incurred by the business
limited liability - Correct answer-the responsibility of a business owner for losses
only up to the amount they invest in the business
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, general partner - Correct answer-an owner (partner) who has unlimited liability and
is active in managing the firm
limited partner - Correct answer-an owner who invests money in the business but
doesn't have any management responsibility or liability for losses beyond his or her
investment
general partnership - Correct answer-a partnership in which all owners share in
operating the business and in assuming unlimited liability for debts and damages
incurred by the business
limited partnership - Correct answer-a partnership with one or more general
partners and one or more limited partners
limited liability partnership - Correct answer-a partnership that limits all partners'
risk of losing their personal assets to only their own acts or omissions and those of
people under their supervision. advantage is that partners are not responsible for
acts or omissions of other partners
conventional corporation (type C) - Correct answer-state chartered legal entity with
authority to act and have liability separate from its owners. subject to double
taxation
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
