Bus 100 Test #2 Ch.4

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yeuxverts9
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Bus 100 Test #2 Ch.4
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2010-03-04 05:21:36
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Bus 1oo Test #2 Ch 4
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Bus 100 Test #2 Ch.4
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  1. A corporation chartered by a foreign government and conducting business in the United States.
    Alien corporation
  2. The top governing body of a corporation, the members of which are elected by the stockholders
    Board of directors
  3. A corporation whose stock is owned by relatively few people and is not sold to the general public
    Closed corporation
  4. Stock owned by individuals or firms who may vote on corporate matters but whose claims on profit and assets are subordinate to the claims of others
    Common stock
  5. An association of individuals or firms whose purpose is to perform some business function for its members
    Cooperative
  6. The chairman of the board, president, executive vice presidents, corporate secretary, treasurer, and any other top executive appointed by the board of directors
    Corporate officers
  7. An artificial person created by law with most of the legal rights of a real person, including the rights to start and operate a business, to buy or sell property, to borrow money, to sue or be sued, and to enter into binding contracts
    Corporation
  8. A distribution of earnings to the stockholders of a corporation
    Dividend
  9. A corporation in the state in which it is incorporated
    Domestic corporation
  10. A corporation in any state in which it does business except the one in which it is incorporated
    Foreign corporation
  11. A person who assumes full or shared responsibility for operating a business
    General partner
  12. A situation in which the management and board of directors of a firm targeted for acquisition disapprove of the merger
    Hostile takeover
  13. A situation in which the management and board of directors of a firm targeted for acquisition disapprove of the merger
    Hostile takeover
  14. A purchase arrangement that allows a firm’s managers and employees or a group of investors to purchase the company
    Leveraged buyout (LBO)
  15. A feature of corporate ownership that limits each owner’s financial liability to the amount of money that he or she has paid for the corporation’s stock
    Limited liability
  16. A person who contributes capital to a business but has no management responsibility or liability for losses beyond the amount he or she invested in the partnership
    Limited partner
  17. A form of business ownership that combines the benefits of a corporation and a partnership while avoiding some of the restrictions and disadvantages of those forms of ownership
    Limited-liability company (LLC)
  18. A business partnership that is owned and managed like a corporation but often taxed like a partnership
    Master limited partnership (MLP)
  19. The purchase of one corporation by another
    Merger
  20. A corporation organized to provide a social, educational, religious, or other service rather than to earn a profit
    Not-for-profit corporation
  21. A corporation whose stock can be bought and sold by any individual
    Open corporation
  22. Voluntary association of two or more persons to act as co-owners of a business for profit
    Partnership
  23. Stock owned by individuals or firms who usually do not have voting rights but whose claims on dividends are paid before those of common-stock owners
    Preferred stock
  24. Legal form listing issues to be decided at a stockholders’ meeting and enabling stockholders to transfer their voting rights to some other individual or individuals
    Proxy
  25. A technique used to gather enough stockholder votes to control a targeted company
    Proxy fight
  26. A corporation that is taxed as though it were a partnership
    S-corporation
  27. A business that is owned (and usually operated) by one person
    Sole proprietorship
  28. The shares of ownership of a corporation
    Stock
  29. A person who owns a corporation’s stock
    Stockholder
  30. A temporary association of individuals or firms organized to perform a specific task that requires a large amount of capital
    Syndicate
  31. An offer to purchase the stock of a firm targeted for acquisition at a price just high enough to tempt stockholders to sell their shares
    Tender offer
  32. A legal concept that holds a business owner personally responsible for all the debts of the business
    Unlimited liability
  33. Over 71 percent of the country's businesses are organized as sole proprietorships.

    A. True
    B. False
    A
  34. Master limited partnerships are taxed like corporations.

    A. True
    B. False
    B
  35. The profits of a sole proprietorship are taxed as personal income of the owner.

    A. True
    B. False
    A
  36. An incorporated business in New York is an alien corporation in Virginia.

    A. True
    B. False
    B
  37. It is often difficult for sole proprietors to borrow large sums of money.

    A. True
    B. False
    A
  38. A leveraged buyout usually requires new stockholders to invest a specific amount.

    A. True
    B. False
    B
  39. All general partners are active in day-to-day business operations.

    A. True
    B. False
    A
  40. A foreign business must incorporate in the state where it does the most business.

    A. True
    B. False
    B
  41. Partnerships must pay a special federal income tax on their business profits.

    A. True
    B. False
    B
  42. Partnerships must pay a special federal income tax on their business profits.

    A. True
    B. False
    B
  43. In partnerships, unlimited liability means the partners are not fully responsible for all debts of the business.

    A. True
    B. False
    B
  44. An advantage of a sole proprietorship is the:

    a. retention of all profits.
    b. inflexibility.
    c. unlimited liability.
    d. ease in borrowing.
    e. lack of secrecy.
    A
  45. Which form of business ownership is most popular in the United States?

    a. joint venture
    b. corporation
    c. partnership
    d. sole proprietorship
    e. cooperative
    D
  46. Some partners are called limited partners because:

    a. they are active in managing the partnership.
    b. their liability is limited to the amount that has been invested.
    c. they do not contribute capital.
    d. they do not share in the profits.
    e. their liability is unlimited.
    B
  47. Company A offers to purchase the stock of Company B, targeted for acquisition, at a price high enough to tempt stockholders to sell. This is known as a/an:

    a. hostile takeover.
    b. proxy fight.
    c. tender offer.
    d. buyout.
    e. initial public offering.
    C
  48. When a manufacturer merges with a supplier, it is called a:

    a. merger.
    b. horizontal merger.
    c. vertical merger.
    d. conglomerate.
    e. partnership.
    C
  49. A not-for-profit corporation:

    a. provides services rather than focuses on profits.
    b. is the way most museums operate.
    c. is organized this way to ensure limited liability.
    d. allows surplus funds to be reinvested in activities of the business.
    e. All of these are true statements about not-for-profit businesses.
    E
  50. Which statement is NOT true about partnerships?

    a. Partnerships are relatively easy to form.
    b. All profits belong to the owners of the partnership.
    c. The partnership pays no income tax.
    d. A general partner has limited liability.
    e. A partnership usually has more capital available than a sole proprietorship does.
    D
  51. Which statement is an advantage of a limited-liability company?

    a. It has unlimited liability.
    b. Management flexibility is an asset.
    c. The number of stockholders is restricted.
    d. Many tax regulations must be followed.
    e. The IRS rules often hamper its operations.
    B
  52. Businesses use horizontal mergers to:

    a. increase growth.
    b. reduce competition.
    c. increase the number of firms in the industry.
    d. increase competition.
    e. gain control over more levels of the operation.
    B
  53. Management disagreements can have the most detrimental effect on:

    a. sole proprietorships.
    b. partnerships.
    c. corporations.
    d. S-corporations.
    e. syndicates.
    B
  54. Corporations generate almost 84 percent of all sales revenue in the United States.

    A. True
    B. False
    A
  55. Takeover opponents argue that takeovers enhance corporate profitability and productivity.

    A. True
    B. False
    B
  56. A large number of businesses are incorporated in the state of Delaware because it has low organizational costs.

    A. True
    B. False
    A
  57. Dividends are the earnings distributed from a partnership business.

    A. True
    B. False
    B
  58. The board of directors is elected by the stockholders.

    A. True
    B. False
    A
  59. A proxy lists issues to be decided at a stockholders' meeting.

    A. True
    B. False
    A
  60. Forming a corporation is an easy and inexpensive process.

    A. True
    B. False
    B
  61. The length of time a corporation is to exist is included in the articles of incorporation.

    A. True
    B. False
    A
  62. An S-corporation is taxed as though it were a partnership.

    A. True
    B. False
    A
  63. The main advantages of a partnership over a sole proprietorship are the added capital and management expertise.

    A. True
    B. False
    A
  64. An initial public offering is the term to describe the first time a corporation sells stock to the general public.

    A. True
    B. False
    A
  65. A corporation whose stock can be purchased by anyone and is traded on the stock market is a/an ________ corporation.

    a. government-owned
    b. open
    c. closed
    d. S-
    e. not-for-profit
    B
  66. When DuPont distributes part of its earnings to its stockholders, what is it called?

    a. interest
    b. profit sharing
    c. dividends
    d. ownership
    e. shares
    C
  67. An arrangement that allows employees to purchase their company is called a:

    a. vertical merger.
    b. divestiture.
    c. tender offer.
    d. leveraged buyout.
    e. hostile takeover.
    D
  68. General partners are responsible for all debts of the business. They run the risk of using their personal assets to pay creditors. This disadvantage is known as:

    a. double taxation.
    b. frozen investment.
    c. lack of continuity.
    d. unlimited liability.
    e. limited liability.
    D
  69. A merger between firms that make and sell similar products or services in similar markets is called a:

    a. vertical merger.
    b. divestiture.
    c. tender offer.
    d. horizontal merger.
    e. hostile takeover.
    D
  70. A corporation incorporated in Massachusetts doing business in New York would be known as a(n):

    a. alien corporation in Massachusetts.
    b. domestic corporation in New York.
    c. alien corporation in New York.
    d. domestic corporation in Massachusetts.
    e. foreign corporation in Massachusetts.
    D
  71. John invests money in a partnership but is not interested in actively working in the firm. He is called a/an:

    a. incorporator.
    b. limited partner.
    c. general partner.
    d. director.
    e. secret partner.
    B
  72. Limited partners invest money in a business but are not responsible for any management decisions or losses beyond the original investment. They do not run any risk of using their personal assets to pay creditors. This advantage is known as:

    a. double taxation.
    b. frozen investment.
    c. lack of continuity.
    d. limited liability.
    e. unlimited liability
    D
  73. PepsiCo acquired Pizza Hut. What type of merger was this?

    a. conglomerate
    b. syndicate
    c. joint venture
    d. horizontal
    e. vertical
    E

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