Cross 9e TBB Ch17
Chapter 17
Small Business Organizations
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
1. A sole proprietor does not own the entire business.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
2. In choosing a form of business organization for a new enterprise, important factors include the ability to raise capital.
ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Critical Thinking
3. A sole proprietor is free to make any decision he or she wishes concerning the business.
ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
4. The intent to associate is a key element of a partnership.
answer: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
5. One can join a partnership even if all other partners do not consent.
answer: F PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
6. The partnership is a pass-through entity and a taxpaying entity.
answer: F PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
7. The majority rule controls decisions that significantly affect the nature of the partnership or that are outside the ordinary course of the partnership business.
answer: F PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
8. A partner may pursue his or her own interests without automatically violating the partner’s fiduciary duties to the partnership and the other partners.
answer: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
9. Limits on a partner’s authority normally are effective only with respect to third parties who are notified of the limitation.
answer: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
10. Dissociation normally entitles the partner to
Small Business Organizations
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
1. A sole proprietor does not own the entire business.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
2. In choosing a form of business organization for a new enterprise, important factors include the ability to raise capital.
ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Critical Thinking
3. A sole proprietor is free to make any decision he or she wishes concerning the business.
ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
4. The intent to associate is a key element of a partnership.
answer: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
5. One can join a partnership even if all other partners do not consent.
answer: F PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
6. The partnership is a pass-through entity and a taxpaying entity.
answer: F PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
7. The majority rule controls decisions that significantly affect the nature of the partnership or that are outside the ordinary course of the partnership business.
answer: F PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
8. A partner may pursue his or her own interests without automatically violating the partner’s fiduciary duties to the partnership and the other partners.
answer: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
9. Limits on a partner’s authority normally are effective only with respect to third parties who are notified of the limitation.
answer: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
10. Dissociation normally entitles the partner to