FIN 310 Exam 2 UPDATED ACTUAL
Exam Questions and CORRECT Answers
In which form of business organization is the taxation effects characterized by the income
flowing to shareholders taxed at personal tax rates? - CORRECT ANSWER - Corporations
Which of the following numbers of shareholders is allowed in a Subchapter S corporation
business form? - CORRECT ANSWER - less than 100
In which form of business organization are the owners not offered the protection of limited
liability? - CORRECT ANSWER - Sole Proprietorship
The rules and procedures established to govern the corporation are called the - CORRECT
ANSWER - corporate bylaws
Which of the following business organizational forms provides the owners with limited investor
liability and passes its income before taxes through to the owners? - CORRECT
ANSWER - S corporations and LLC
Which form of business organization is characterized by having the shortest start-up time and
lowest legal costs? - CORRECT ANSWER - Proprietorship
Which of the following are intellectual property rights in the form of inventions and information
such as formulas, processes and customer lists that are not generally known to others and which
convey economic advantage to the holders? - CORRECT ANSWER - Trade Secrets
Which of the following are intellectual property rights granted for inventions that are useful,
novel and non-obvious? - CORRECT ANSWER - Patents
Intellectual property can be protected by all of the following - CORRECT ANSWER -
patents, trade secretes, trademarks, and copyrights
, Not = legal disclaimers
Which of the following are intellectual property rights to writings in written and electronically
stored forms? - CORRECT ANSWER - copyrights
The financial statement that provides a snapshot of a business' financial position as of a specific
date is called the: - CORRECT ANSWER - balance sheet
The balance sheet equation states that total assets equal: - CORRECT ANSWER - total
liabilities + owners equity
Which of the following is not considered a current asset?
fixed asset
cash
receivables
inventories - CORRECT ANSWER - fixed assets
Retained earnings is: - CORRECT ANSWER - part of owners equity
Which is not a characteristic of inventories?
raw materials
work-in-process
goods sold but not yet shipped
finished product - CORRECT ANSWER - goods sold but not yet shipped
Exam Questions and CORRECT Answers
In which form of business organization is the taxation effects characterized by the income
flowing to shareholders taxed at personal tax rates? - CORRECT ANSWER - Corporations
Which of the following numbers of shareholders is allowed in a Subchapter S corporation
business form? - CORRECT ANSWER - less than 100
In which form of business organization are the owners not offered the protection of limited
liability? - CORRECT ANSWER - Sole Proprietorship
The rules and procedures established to govern the corporation are called the - CORRECT
ANSWER - corporate bylaws
Which of the following business organizational forms provides the owners with limited investor
liability and passes its income before taxes through to the owners? - CORRECT
ANSWER - S corporations and LLC
Which form of business organization is characterized by having the shortest start-up time and
lowest legal costs? - CORRECT ANSWER - Proprietorship
Which of the following are intellectual property rights in the form of inventions and information
such as formulas, processes and customer lists that are not generally known to others and which
convey economic advantage to the holders? - CORRECT ANSWER - Trade Secrets
Which of the following are intellectual property rights granted for inventions that are useful,
novel and non-obvious? - CORRECT ANSWER - Patents
Intellectual property can be protected by all of the following - CORRECT ANSWER -
patents, trade secretes, trademarks, and copyrights
, Not = legal disclaimers
Which of the following are intellectual property rights to writings in written and electronically
stored forms? - CORRECT ANSWER - copyrights
The financial statement that provides a snapshot of a business' financial position as of a specific
date is called the: - CORRECT ANSWER - balance sheet
The balance sheet equation states that total assets equal: - CORRECT ANSWER - total
liabilities + owners equity
Which of the following is not considered a current asset?
fixed asset
cash
receivables
inventories - CORRECT ANSWER - fixed assets
Retained earnings is: - CORRECT ANSWER - part of owners equity
Which is not a characteristic of inventories?
raw materials
work-in-process
goods sold but not yet shipped
finished product - CORRECT ANSWER - goods sold but not yet shipped
