Fin 534 Week 5 Midterm Exam Part 1 – New Essay examples

3697 Words Feb 18th, 2016 15 Pages
FIN 534 Week 5 Midterm Exam Part 1 – NEW

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FIN 534 Week 5 Midterm Exam Part 1 – NEW
TRUE/FALSE

The form of organization for a business is not an important issue, as this decision has very little effect on the income and wealth of the firm’s owners. The major advantage of a regular partnership or a corporation as a form of business organization is the fact that both offer their owners limited liability, whereas proprietorships do not. There are three primary disadvantages of a regular partnership: (1) unlimited liability, (2) limited life of the organization, and (3) difficulty of transferring
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They change the bid and ask prices of the securities so as to keep supply and demand in balance. The disadvantages associated with a proprietorship are similar to those under a partnership. One exception relates to the more formal nature of the partnership agreement and the commitment of all partners’ personal assets. As a result, partnerships do not have difficulty raising large amounts of capital. The facts that a proprietorship, as a business, pays no corporate income tax, and that it is easily and inexpensively formed, are two key advantages to that form of business. MULTIPLE CHOICE Which of the following statements is CORRECT?
a. One of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt.
b. Sole proprietorships are subject to more regulations than corporations.
c. In any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner.
d. Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones.
e. Corporations of all types are subject to the corporate income tax. Which of the following statements is CORRECT?
a. One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.
b. It is generally

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