Q u e s t i o n :

(TCO A) Which of the following statements is CORRECT?

Student Answer:
One of the disadvantages of incorporating a business is that the owners then become
subject to liabilities in the event the firm goes bankrupt.
Sole proprietorships are subject to more regulations than corporations.
In any type of partnership, every partner has the same rights, privileges, and liability
exposure as every other partner.
Sole proprietorships and partnerships generally have a tax advantage over many
corporations, especially large ones.
Corporations of all types are subject to the corporate income tax.
Instructor Explanation:
Chapter 1
Explanation: Ch 1: d is correct, all others are incorrect a:
incorporating provides owners limited liability b: sole
proprietorship has less regulation than corporation c: In limited
partnerships certain partners can be designated general partners
and others limited partners with differences in control and
liability d. sole proprietorships and partnerships are taxed just
once at owner level (pass-through of income to owners)whereas
corporation earnings can be double or triple taxed depending on
individual or corporate ownership ofstocke. Scorps can elect to be taxed as proprietorship orpartnership
Points Received:
0 of 10
Comments:2 . Q u e s t i o n :
(TCO G) Which of the following statements is CORRECT?
Student Answer:
The statement of cash flows reflects cash flows from operations, but it does not reflect
the effects of buying or selling fixed assets.
The statement of cash flows shows where the firms cash is located; indeed, it provides
a listing of all banks and brokerage houses where cash is on deposit.
Classified - Internal use