QUESTION Raj loves cars. He wants to buy a product-distribution franchise in the automotive industry. Which company should he purchase? A) a car rental company in which Raj pays for the rights to use a company’s name B) a car sales showroom in which Raj sells cars previously bought and sold C) a car repair […]
Date: September 3rd, 2020
QUESTION What is a chain store? A) any franchise whatsoever B) one of multiple franchises owned by the same person C) one of multiple franchises owned by the same partners, each of whom runs one store D) a franchise in which franchisees are given the right to manufacture and distribute a certain product, following a […]
Date: September 3rd, 2020
QUESTION Which type of corporation can have up to 100 owners, faces only one level of federal taxation, and can provide its owners with both salaries and distributions? A) an LLC B) an LLP C) a C corporation D) an S corporation E) a B corporation ANSWER Answer: D Explanation: D) An S corporation […]
Date: September 3rd, 2020
QUESTION What happens when a privately owned company goes public? A) The company now operates in several countries. B) Most of its stock is now owned by another corporation. C) It becomes an approved monopoly providing basic public services. D) Its shares can now be easily bought and sold by investors. E) Its shares can […]
Date: September 3rd, 2020
QUESTION Which of the following is NOT information you must include on an application for incorporation? A) principal business purposes B) the corporation’s minimum capital C) the company’s hours of operation D) methods for transferring shares of stock E) names and addresses of directors ANSWER Answer: C Explanation: C) Hours of operation is not […]
Date: September 3rd, 2020
QUESTION With its larger sums of money, a corporation is in a better position than a sole proprietorship or a partnership to find good talent, as well as to acquire buildings and equipment that can give it more power in the marketplace. Which benefit of corporation does this description represent? A) having little or no […]
Date: September 3rd, 2020
QUESTION Madelaine has figured out how to make an antiwrinkle cream using natural ingredients. She buys her ingredients only from fair trade suppliers, and she did not allow her product to be tested on animals. She has 15 employees to manufacture and sell her product, and she donates 10 percent of her gross sales to […]
Date: September 3rd, 2020
QUESTION Patagonia makes outdoor apparel for people in what it calls “silent sports. None requires a motor; none delivers the cheers of a crowd.” The company hopes to elicit “hard-won grace and moments of connection between us and nature.” It donates 1 percent or more of its sales to support grassroots environmental organizations. What kind […]
Date: September 3rd, 2020
QUESTION Jeremy and three friends began making and selling snowboards from Jeremy’s garage five years ago. They are so successful now that they have a factory with many employees, and they have decided to restructure the company. They are going to sell stock, but they will continue to be taxed at a lesser rate than […]
Date: September 3rd, 2020
QUESTION Which of the following is NOT a drawback of being a publicly held corporation? A) dealing with operating costs and paperwork B) owners being personally liable for damages C) being taxed twice D) difficulty ending the corporation E) getting possible tax breaks ANSWER Answer: B Explanation: B) A corporation’s owners, unlike as in […]
Date: September 3rd, 2020
