1)True or false? When choosing the appropriate legal entity for a business (regular corp vs. partnership vs. sole proprietorship vs. LLC vs. S corp) you should consider BOTH tax and legal issues.

		True
		False

2)What is an LLC and how is it taxed?

		An LLC is a corporation that is taxed like a partnership.
		An LLC is a partnership that is taxed like a "regular" corporation.

3)Regarding the tax treatment of payments to securities holders; which of the following statements is completely true? The question is aimed at the PAYER of interest and/or dividends, not the recipient.

		interest paid is NOT tax-deductible; cash dividends paid to common stockholders are tax-deductible.
		interest paid is tax-deductible; cash dividends paid to common stockholders are also tax-deductible.
		interest paid is NOT tax-deductible; cash dividends paid to common stockholders are also NOT tax-deductible.
		interest paid is tax-deductible; but cash dividends paid to common stockholders are NOT tax-deductible.

4)Which of the following is a STRENGTH of the corporate form of organization? You are identifying a strength, not a weakness.

		Profits are subject to one level of taxation.
		Profits are subject to multiple levels of taxation.
		Owner faces LIMITED liability.
		Owner faces UNLIMITED liability.