Multiple Choice Questions 1 CPA QUESTION Assuming all other requirements are met, a corporation may elect to be treated as an S corporation under the Internal Revenue Code if it has A Both common and preferred stockholders B A partnership as a stockholder C 100 or fewer stockholders D Th e consent ...

1 c 100 or fewer stockholders 2 a Partners are liable t ...

Multiple-Choice Questions 1. CPA QUESTION: Assuming all other requirements are met, a corporation may elect to be

Question:

Multiple-Choice Questions
1. CPA QUESTION: Assuming all other requirements are met, a may elect to be treated as an S under the Internal Revenue Code if it has:
A. Both common and preferred stockholders
B. A as a stockholder
C. 100 or fewer stockholders
D. Th e consent of a majority of the stockholders

2. Which of the following statements is false:
A. Partners are liable to the for their own negligent conduct.
B. Partners must turn over to the any earnings from an activity that is related to the partnership’s business.
C. If a partner is off ered an opportunity that is related to the business, he must fi rst seek permission of the other partners before accepting it.
D. A partner must turn over any profi ts from an activity that is a confl ict of interest with the Partners are personally liable for intentional misconduct.

3. Th e following event does not automatically dissolve a term Th e achieves its goals.
B. A is dissociated and all of the remaining partners vote to wind up the business.
C. A court determines the cannot be run at a profi t.
D. A partner withdraws.
E. Th e partners agree to dissolve before the end of the term.

4. Joint and several liability means that:
A. A creditor of the must sue all of the partners together.
B. A creditor of the must sue the and all of the partners together.
C. A creditor of the can recover the full amount owed from the or from any of the partners.
D. A creditor of the can recover the full amount owed from the and from each partner, even if this results in the creditor receiving more than his original debt.
E. A creditor of the can recover from the partners individually, but not from the While working part-time at a Supercorp restaurant, Jenna spills a bucket of hot French fries on a customer. Who is liable to the customer?
A. Supercorp alone
B. Jenna alone
C. Both Jenna and Supercorp
D. Jenna, Supercorp, and the president of Supercorp
E. Jenna, Supercorp, and the shareholders of Supercorp

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...