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Question 1 Which of the following is TRUE regarding a corporation?a. it is authorized by statuteb. it is managed by the federal governmentc. it is created and recognized by international treatiesd. it is created by local city ordinanceQuestion 2 The responsibility for the overall management of a corporation belongs to:a. shareholdersb. the board of directorsc. the chief executive officerd. the chief financial officerQuestion 3 In simple terms, a Subchapter S-corporation:a. composed entirely of licensed professionalsb. whose shareholders are taxed like shareholders but have full liabilityc. whose shareholders have limited liability and avoid paying corporate taxes.d. regulated by the securities authorities
Question 4 Articles of incorporation contain:a. the minutes of meetings of the board of directorsb. information about a corporation, including its organization and functionsc. resolutions of the board of directorsd. list of officers of the corporationQuestion 5 Stock may be described as:a. a document describing the ownership and management structure of a corporationb. an ownership interest in a corporationc. a debt owed by a corporation to a shareholderd. a debt owed by the government to a shareholder
Question 6 If Companies A and B join and become Company C, the legal process that has taken place is called:a. an appraisalb. a consolidationc. an acquisitiond. a mergerQuestion 7 Peggy incorporates her business in her home state of Delaware. If she wants to expand to Texas, under Texas law her company is considered to be:a. a foreign corporationb. an open corporationc. a public corporationd. an alien corporationQuestion 8 Travis buys 250 shares of common stock in Toyz for U-n-Me. As a shareholder, he acquires rights to:a. determine the amount of dividends to be paidb. receive a fixed sum on a fixed datec. receive dividends before creditors are paidd. voteQuestion 9 Sugar Corporation wishes to purchase all of the Spice Corporation’s bakery equipment worth several million dollars. Who has to approve the purchase?a. shareholdersb. employeesc. the corporation’s bankd. the board of directors
Question 10 The by-laws of a corporation include which of the following?a. the names of the original incorporatorsb. when and where annual shareholders meetings are heldc. the amount of common stock initially issued by the corporationd. the names of the original board of directors
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