AFSB 152 COMPREHENSIVE EXAM
QUESTIONS AND CORRECT ANSWERS
STUDY GUIDE
●● Partnership
Answer: A for-profit business entity jointly owned by two or more
persons who share ownership and profits or losses.
●● General Partnership
Answer: A partnership in which each partner assumes unlimited joint
liability for all partnership debts.
●● Limited Partnership
Answer: A partnership made up of general partners with unlimited
liability and limited partners whose liability is limited to contributed
capital.
●● Corporation
Answer: An entity organized under law and entitled to the same rights as
a person, distinct from its owners.
●● Promoter
Answer: A person who brings a corporation into being.
, ●● Articles of Incorporation
Answer: A document prepared during corporation formation stating
goals, objectives, and the kind of business.
●● Shareholder
Answer: An individual owner whose liability is limited to his or her
investment in the corporation.
●● Subchapter S Corporation
Answer: A small business corporation restricted to max 100 stockholders
with pass-through taxation and limited liability.
●● Merger
Answer: A type of acquisition in which two or more business entities are
combined into one.
●● Limited Liability Company (LLC)
Answer: A business entity providing the limited liability of a corporation
and the tax advantages of a partnership.
●● Joint Venture
Answer: A business association formed by agreement of two or more
persons to accomplish a particular project.
QUESTIONS AND CORRECT ANSWERS
STUDY GUIDE
●● Partnership
Answer: A for-profit business entity jointly owned by two or more
persons who share ownership and profits or losses.
●● General Partnership
Answer: A partnership in which each partner assumes unlimited joint
liability for all partnership debts.
●● Limited Partnership
Answer: A partnership made up of general partners with unlimited
liability and limited partners whose liability is limited to contributed
capital.
●● Corporation
Answer: An entity organized under law and entitled to the same rights as
a person, distinct from its owners.
●● Promoter
Answer: A person who brings a corporation into being.
, ●● Articles of Incorporation
Answer: A document prepared during corporation formation stating
goals, objectives, and the kind of business.
●● Shareholder
Answer: An individual owner whose liability is limited to his or her
investment in the corporation.
●● Subchapter S Corporation
Answer: A small business corporation restricted to max 100 stockholders
with pass-through taxation and limited liability.
●● Merger
Answer: A type of acquisition in which two or more business entities are
combined into one.
●● Limited Liability Company (LLC)
Answer: A business entity providing the limited liability of a corporation
and the tax advantages of a partnership.
●● Joint Venture
Answer: A business association formed by agreement of two or more
persons to accomplish a particular project.
