Which of the following forms of business organization is the dominant economic force in the United States?

 Which of the following forms of business organization is the dominant economic force in the United States?

A) The sole proprietorship

B) The general partnership

C) The limited partnership

D) The joint venture

E) The corporation

A limited partner is liable

A) for only his or her own share of the partnership's debts.

B) for his or her own share of the partnership's debts and contingently liable for the other partners shares.

C) only up to the amount invested by that partner.

D) for none of the partnership's debts.

 A corporation is owned by

A) shareholders and partners.

B) the shareholders who hold the company's stock.

C) the Board of Directors.

D) its Chief Executive Officer.

The major sources of financing for corporations are

A) partners contributions.

B) exchanges between shareholders.

C) interest and dividends.

D) debt and equity.

The term stockholder is equivalent to

A) general partner.

B) creditor.

C) shareholder.

D) stakeholder.

 The sole proprietorship is the same as the individual for liability purposes.

Answer:  TRUE

 In a general partnership, all partners have unlimited liability for the actions of any one partner when that partner is conducting business for the firm.

Answer:  TRUE

There is no legal distinction made between the assets of the business and the personal assets of the owners in the limited partnership.

Answer:  FALSE

Which of the following stages of equity financing comes first in the traditional order of progression?

A) Investment by friends and family of the founders.

B) Initial Public Offering.

C) Investment by the founders of the business.

D) Outside investment by "angel" investors and venture capital firms.

Answer: C

Which of the following is not a true statement?

A) The debt to equity ratio measures a company's risk and is calculated as total liabilities divided by stockholders' equity.

B) Leverage enables a company to earn a higher return using debt than without debt.

C) Return on assets is calculated as net income divided by the ending balance for total assets.

D) The times interest earned ratio compares interest expense with income available to pay interest charges.

Answer: C

In terms of total sales, assets, and earnings, the dominant form of business organization is a:

A) Sole proprietorship.

B) Partnership.

C) Corporation.

D) Limited liability company (LLC).

Answer: C