41) When starting a business you should first ________.
A) write a business plan
B) borrow from creditors
C) purchase inventory
D) become incorporated
42) Double taxation occurs because businesses pay ________.
A) sales tax and income tax
B) property taxes and income taxes
C) taxes on net income, and owners pay taxes on the remaining net income distributed as dividends
D) social security taxes for employees, and employees also pay the same amount for themselves
43) Limited legal liability for owners is a characteristic of ________.
A) sole proprietorships
B) partnerships
C) corporations
D) not-for-profits
44) Which organization should keep its financial records separate from the personal financial affairs of the owner(s)?
A) sole proprietorship
B) partnership
C) corporation
D) All of these are correct.
45) In which of the following are the owners' or owner's personal assets at risk if the business does not have enough money to pay its liabilities?
A) sole proprietorship
B) partnership
C) corporation
D) Two of these are correct.
46) The stock exchange is ________.
A) where companies may issue stock
B) regulated by the Securities and Exchange Commission (SEC)
C) where buyers and sellers exchange their shares of stock.
D) All of these are correct.
47) In 2012, Baroque, Inc., a U. S. corporation, earned profits of $200,000 before taxes. After paying federal income taxes of 30%, all of Baroque's after-tax income was paid to its only shareholder. The federal income tax rate on corporate dividends is 15%. How much tax will Baroque's shareholder pay on these dividends?
A) $21,000
B) $30,000
C) $60,000
D) $102,000
48) Use this financial statement to answer the following question;
Cash$ 3,000Liabilities$ 2,500
Accounts receivable 2,000
InventoryACommon stockB
Supplies 1,000Retained earnings 500
Total$10,000TotalC
This business must be organized as a ________.
A) sole proprietorship
B) partnership
C) corporation
D) Two of these are possible.
49) Profit is the difference between assets and liabilities.
50) All businesses are formed to create something of value from scratch.