Test Bank for Corporate Finance, 6th Canadian Edition by Topic : 1.1 The Three Types of Firms
Jonathan Berk, Peter DeMarzo - Complete Chapters 4) Which of the following is NOT an advantage of a sole proprietorship?
Included Chap 1 to 31 2025 A) Single taxation
B) Ease of setup
Chapter 1 The Corporation and Financial Markets
C) Limited liability
D) No separation of ownership and control Answer: C
1.1 The Three Types of Firms
Diff: 2 Type: MC
Topic : 1.1 The Three Types of Firms
1) A sole proprietorship is owned by: A)
one person.
5) Which of the following statements regarding limited partnerships is true? A)
B) two or more people.
There is no limit on a limited partner's liability.
C) shareholders.
B) A limited partner's liability is limited by the amount of his investment.
D) bankers. Answer: A
C) A limited partner is not liable until all of the assets of the general partners have been
Diff: 1 Type: MC
exhausted.
Topic : 1.1 The Three Types of Firms
D) A general partner's liability is limited by the amount of his investment. Answer: B
Diff: 2 Type: MC
2) Which of the following organization forms is the most common in the economy?
Topic : 1.1 The Three Types of Firms
A) Limited Liability Partnership
B) Limited Partnership
6) Which of the following are advantages of incorporation?
C) Sole Proprietorship
A) Access to capital markets
D) Publicly Traded Corporation Answer: C
B) Limited liability
Diff: 1 Type: MC
C) Unlimited life
Topic : 1.1 The Three Types of Firms
D) All of the above Answer: D
Diff: 2 Type: MC
3) Which of the following organization forms earns the most revenue?
Topic : 1.1 The Three Types of Firms
A) Privately Owned Corporation
B) Limited Partnership
7) In Canada, a limited liability partnership, LLP, is essentially: A)
C) Publicly Owned Corporation
a limited partnership without limited partners.
D) Limited Liability Company Answer: C
B) a limited partnership without a general partner.
Diff: 1 Type: MC
C) just another name for a limited partnership.
A+ Page 1 A+ Page 2
Jonathan Berk, Peter DeMarzo - Complete Chapters 4) Which of the following is NOT an advantage of a sole proprietorship?
Included Chap 1 to 31 2025 A) Single taxation
B) Ease of setup
Chapter 1 The Corporation and Financial Markets
C) Limited liability
D) No separation of ownership and control Answer: C
1.1 The Three Types of Firms
Diff: 2 Type: MC
Topic : 1.1 The Three Types of Firms
1) A sole proprietorship is owned by: A)
one person.
5) Which of the following statements regarding limited partnerships is true? A)
B) two or more people.
There is no limit on a limited partner's liability.
C) shareholders.
B) A limited partner's liability is limited by the amount of his investment.
D) bankers. Answer: A
C) A limited partner is not liable until all of the assets of the general partners have been
Diff: 1 Type: MC
exhausted.
Topic : 1.1 The Three Types of Firms
D) A general partner's liability is limited by the amount of his investment. Answer: B
Diff: 2 Type: MC
2) Which of the following organization forms is the most common in the economy?
Topic : 1.1 The Three Types of Firms
A) Limited Liability Partnership
B) Limited Partnership
6) Which of the following are advantages of incorporation?
C) Sole Proprietorship
A) Access to capital markets
D) Publicly Traded Corporation Answer: C
B) Limited liability
Diff: 1 Type: MC
C) Unlimited life
Topic : 1.1 The Three Types of Firms
D) All of the above Answer: D
Diff: 2 Type: MC
3) Which of the following organization forms earns the most revenue?
Topic : 1.1 The Three Types of Firms
A) Privately Owned Corporation
B) Limited Partnership
7) In Canada, a limited liability partnership, LLP, is essentially: A)
C) Publicly Owned Corporation
a limited partnership without limited partners.
D) Limited Liability Company Answer: C
B) a limited partnership without a general partner.
Diff: 1 Type: MC
C) just another name for a limited partnership.
A+ Page 1 A+ Page 2
