ONE CAINTA COLLEGE

ONE INSTITUTE OF TECHNOLOGY

Cainta College Cainta, Rizal

Course Title : FINANCIAL ACCOUNTING 1 (BOOKKEEPING NC III)

Course Code : BKKPG 1
Course Credit : 6 UNITS

Quiz# 2. Write word correct answer

1. The three major forms of business organizations in the United States are
Corporations, sole proprietorships, and general partnerships.
Corporations, general proprietorships, and general partnerships.
Corporations, sole proprietorships, and limited partnerships.
None of the above.
2. What is one advantage of a sole proprietorship?
Limited Size
Unlimited Liability
Limited Life
Secrecy
3. What is a disadvantage of a partnership?
Lack of success
Limited Liability
Unlimited Liability
Birth Defect
4. What is an advantage of a corporation?
Making money
Indefinite Life
Indecent Life
Government Restrictions
5. Which business tends to generate the most revenues?
Corporations
Sole Proprietorships
Partnerships
6. One member of a partnership may bind the other partners in contract because of the law of:
Fiduciary duty
Proprietorship
Agency
Director's liability
7. A principal could be liable for the acts of an agent that exceeded its actual authority on the basis of:
Apparent authority
Express authority
Necessity
Implied authority
8. Which of the following is not an implied obligation or duty of an agent to its principal?
To demonstrate good faith
To act with competence and diligence
To pay reasonable expenses of the agency agreement
To protect confidentiality
9. Which statement is most accurate with respect to partnerships?
A partnership is a separate legal entity
General partners have unlimited liability
Partners are not agents for the firm
Partnership liability requires that one intend to be a partner
10. The most common forms of carrying on business are:
The "Mom and Pop" store
The chip wagon
Sole proprietorship, the partnership, the corporation, and agency
The government-funded agency
11 The simplest business organization, a one-man firm:
Must be run by men only
Must comply with a variety of different laws
Must be run out of the owner's home
Must not be run out of the owner's home
12. A sole proprietorship:
Is the simplest form of business
Is difficult to establish
Can have more than one principal
Is not a recognized form of business
13. A business that is owned by one person who has the sole control over the management and profits is known as:
A partnership.
A sole proprietorship.
A sole partnership.
A corporation.
 ONE CAINTA COLLEGE
ONE INSTITUTE OF TECHNOLOGY
Cainta College Cainta, Rizal

Course Title : FINANCIAL ACCOUNTING 1 (BOOKKEEPING NC III)

Course Code : BKKPG 1
Course Credit : 6 UNITS

14. The three major forms of business organizations in the United States are
Corporations, sole proprietorships, and general partnerships.
Corporations, general proprietorships, and general partnerships.
Corporations, sole proprietorships, and limited partnerships.
None of the above.
15. A business that is owned by one person who has the sole control over the management and profits is known as:
A partnership.
A sole proprietorship.
A sole partnership.
A corporation.
16. Suzanne Meade desires to have the government not interfere as much as possible into her business, she would form:
A corporation.
A limited partnership.
A sole proprietorship.
A corporation.
17. If individuals desire to have all profits divided among the partners, and that all partners be personally liable for
partnership debts, they would form what type of business?
A general partnership.
A limited partnership.
A corporation.
A professional association.
18. Michelle desires to form a business in the United States to do business as a hairdresser. She desires to have as little
legal requirements as possible. She would form what type of business?
A corporation.
A general partnership.
A sole proprietorship.
19. The Meade family desires to form a family-owned business and sell shares only to their friends and a few family
members. They would form what type of business?
A closely held corporation.
A publicly held corporation.
A publicly traded corporation.
A limited corporation.
20. On its "death bed", what type of business goes through a process of dissolution and winding up?
A partnership.
A corporation.
A closely held corporation.
None of the above.
21. Russ Meade is an attorney and desires to form a business. He would form what type of business
A Professional Corporation.
A Limited Corporation.
A sole proprietorship for professionals.
A closely held corporation.
22. A rule that says that corporate officers and directors are not liable for their honest mistakes of business judgment is
called?
The business judgment rule.
The honest mistake rule.
The limited liability rule for directors.
None of the above.
23. Suzanne desires to form a business to market her services world- wide. She is an individual who loves total control
over her business, does not want the government to have much control over her business, and wants to have minimum
legal requirements for the business formation. She would most likely form what type of business?
A sole proprietorship.
A corporation.
A closely held corporation.
A Subchapter S Corporation.
24. Michelle is a fantastic businesswoman who has a total understanding of the IRS Rules, and she believes she would
benefit by having her business taxed as a partnership though operation as a corporation. She would most likely form what
type of business?
A Subchapter L Corporation
A Subchapter S Corporation.
A Closely Held Corporation.
A Limited Partnership Corporation.
25. Unlimited personal liability of individuals may result from forming a sole proprietorship.
True
False
 ONE CAINTA COLLEGE
ONE INSTITUTE OF TECHNOLOGY
Cainta College Cainta, Rizal

Course Title : FINANCIAL ACCOUNTING 1 (BOOKKEEPING NC III)

Course Code : BKKPG 1
Course Credit : 6 UNITS
26. Joan desires to form a business with minimum expense and with minimum government regulation. She should form a
corporation
True
False
27. A publicly traded corporation is one in which its stock is traded on at least one national securities exchange
True
False
28. The corporation is the most dominant form of doing business in the United States today
True
False
29. A Sub Chapter S Corporation is a corporation of limited liability.
True
False
30. The partnership is the most common form of business organization in America today.
True
False
31. Closely held corporations are the most numerous forms of corporations in America today.
True
False
32. Russ, a mountain man, does not like the government to interfere in his business if at all possible. He would most
likely desire to be a sole proprietor
True
False
33. Trading on at least one national securities exchange is a requirement for a closely held corporation.
True
False
34. Most states allow a corporation to issue more than one type of stock.
True
False
35. Most states require that the stockholders manage a corporation.
True
False
36. A proxy is a document that allows a shareholder to transfer his or her rights to vote at a shareholder's meeting.
True
False
Michelle desires to have direct control over a corporation's management. She should try to be elected to the Board of
Trustees.
True
False
37. Directors, officers, and managers of a corporation have a fiduciary obligation to the corporation.
True
False
38. The nominal or face value of a stock or a bond is called its "par value".
True
False
39. Which characteristic does not belong to a sole proprietorship?
 The owner exercises total control.
 The business is legally inseparable from its owner.
 The owner has limited liability for business debts.
 How does a sole proprietor report his business income?
 In his individual income tax return.
 He has to make a second personal tax return.
40. What are the advantages of a sole proprietorship?
 It is simple to form, the owner retains total control, and can pass through losses to the owner.
 It is simple to form, enjoys limited liability, and can pass through losses to the owner.
41. Why is the sole proprietor liable personally for his business debts?
 Because his firm is not a separate entity.
 Because he controls the business.
 Bottom of Form
42. Which of the following businesses represents a sole proprietorship?
 a man who owns and operates a lawn mower repair business by himself
 sisters who make custom wedding gowns from a shop in their home
 a criminal law firm with multiple senior partners
 a consulting firm called AAA Engineering, Incorporated
 ONE CAINTA COLLEGE
ONE INSTITUTE OF TECHNOLOGY
Cainta College Cainta, Rizal

Course Title : FINANCIAL ACCOUNTING 1 (BOOKKEEPING NC III)

Course Code : BKKPG 1
Course Credit : 6 UNITS

43. How many people typically work for a sole proprietorship?

 Only one
 One supervisor and no more than one other employee
 No more than five total people
 It varies by state
 None of the above
44. How does an owner incorporate a sole proprietorship?
 Contact the Secretary of State's office
 File forms through the County Clerk's office
 Sole proprietorships aren't incorporated
 File a Doing Business As form with the state
 Notify the IRS
45. How does an owner start a sole proprietorship?
 Contact the Secretary of State's office
 File forms through the County Clerk's office
 File a Doing Business As form with the state
 Notify the IRS
 Start doing business

Esaay:
1. What are the advantages of proprietorship, partnerships, and a corporation? Please explain your answer in
detail.
2. What are the disadvantages of proprietorship, partnerships and a corporation? Please explain your answer in
detail.
3. Explain one reason why people from corporations.
4. Distinguish sole proprietorship, partnership and corporation.
5. From the distinction what business will yo create?