COB 300 Finance Exam 1 (Liu)
Questions and Answers
Finance - Answers -the system that includes the circulation of money, the granting of
credit, the making of investments, and the provision of banking facilities
Three Parts Finance is Divided Into - Answers -financial management
capital markets
investments
Sarbanes-Oxley Act - Answers -a law passed by Congress that requires the CEO and
CFO to certify that their firm's financial statements are accurate.
Proprietorship - Answers -a business owned by one person
Partnership - Answers -a business owned by two or more people
Advantages of Proprietorship and Partnership - Answers -few regulations
no corporate income tax
easy to set up
Disadvantages of Proprietorship and Partnership - Answers -unlimited liability
limited life
difficult to raise capital
Corporation - Answers -a business owned by stockholders who share in its profits but
are not personally responsible for its debts
Advantages of Corporation - Answers -limited liability
ability to raise capital
easy transfer of ownership
unlimited life
Disadvantages of Corporation - Answers -double taxation
expensive set up and report filing
LLC (Limited Liability Company) - Answers -limited liability, pass through income
taxation, flexibility
only responsible for their investments
Questions and Answers
Finance - Answers -the system that includes the circulation of money, the granting of
credit, the making of investments, and the provision of banking facilities
Three Parts Finance is Divided Into - Answers -financial management
capital markets
investments
Sarbanes-Oxley Act - Answers -a law passed by Congress that requires the CEO and
CFO to certify that their firm's financial statements are accurate.
Proprietorship - Answers -a business owned by one person
Partnership - Answers -a business owned by two or more people
Advantages of Proprietorship and Partnership - Answers -few regulations
no corporate income tax
easy to set up
Disadvantages of Proprietorship and Partnership - Answers -unlimited liability
limited life
difficult to raise capital
Corporation - Answers -a business owned by stockholders who share in its profits but
are not personally responsible for its debts
Advantages of Corporation - Answers -limited liability
ability to raise capital
easy transfer of ownership
unlimited life
Disadvantages of Corporation - Answers -double taxation
expensive set up and report filing
LLC (Limited Liability Company) - Answers -limited liability, pass through income
taxation, flexibility
only responsible for their investments
