The main purpose of creating a trust is to:ġ1. All of these are likely to be operated as a corporation.Īnswer: B Type: Concept Level of Difficulty: Easy LO: 2.1ġ0. Which of the following businesses is most likely to be operated as a corporation?ĭ. Beginning in 2011, in Canada, what will be the most appropriate type of organization for a business with large assets and revenue?Īnswer: B Type: Concept Level of Difficulty: Medium LO: 2.1ĩ. III Some partners may receive a different percentage of the profits.Īnswer: C Type: Concept Level of Difficulty: Medium LO: 2.1Ĩ. II Some of the partners may not be involved in the day-to-day operations. I Some of the partners have limited liability. Which of the following is (are) true about a general partnership? Which of the following is the most correct? _ know their exposure is limited to the amount of capital they invest in the company.Īnswer: D Type: Concept Level of Difficulty: Medium LO: 2.1ħ. What was the reason for the increase in the number of income trusts in Canada?Ħ. In a sole proprietorship, it is easier to transfer ownershipĥ. Shareholders’ liability is limited to their investment in the corporationĭ. Corporate tax laws are often less attractive than personal tax lawsĬ. Which of the following is an advantage of a corporation over a sole proprietorship?ī. If you are in a business that is faced with enormous risks of failure what type of ownership would you avoid?Īnswer: D Type: Concept Level of Difficulty: Easy LO: 2.1Ĥ. Which of the following is not a form of business organization?Īnswer: B Type: Definition Level of Difficulty: Easy LO: 2.1ģ. Corporate tax laws may allow tax deferral or avoidanceĪnswer: C Type: Concept Level of Difficulty: Easy LO: 2.1Ģ. It is easier to from than a proprietorshipĭ. Ownership is relatively easy to transferĬ. Section 2.1 – Types of Business Organizationsġ Which of the following is not a reason for incorporating a business?ī.
Sean Cleary solutions manual and test bank Introduction to Corporate Finance, 2 nd edition, authors Laurence Booth & W.