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Accounting 211 exam

Question	Answer
A corporation is an entity separate and distinct from its owners.	True
As a legal entity, a corporation has most of the rights and privileges of a person.	True
Most of the largest U.S. corporations are privately held corporations.	False
Corporations may buy, own, and sell property; borrow money; enter into legally binding contracts; and sue and be sued.	True
The net income of a corporation is not taxed as a separate entity.	False
Creditors have a legal claim on the personal assets of the owners of a corporation if the corporation does not pay its debts.	False
The transfer of stock from one owner to another requires the approval of either the corporation or other stockholders.	False
The board of directors of a corporation legally owns the corporation.	False
The chief accounting officer of a corporation is the controller.	True
Corporations are subject to fewer state and federal regulations than partnerships or proprietorship.	False
A partnership is an association of three or more persons to carry on as co-owners of a business for profit.	False
The legal requirements for forming a partnership can be quite burdensome.	False
A partnership is not an entity for financial reporting purposes.	False
The net income of a partnership is taxed as a separate entity.	False
The act of any partner is binding on all other partners, even when partners perform business acts beyond the scope of their authority.	True
Each partner is personally and individually liable for all partnership liabilities.	True
In a limited partnership, one or more partners have unlimited liability and one or more partners have limited liability for the debts of the firm.	True
Mutual agency is a major advantage of the partnership form of business.	False

Created by: suroth

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