#1
Which of the following is not a type of business entity?
Employee
ExplanationEmployee is an individual, not a business entity.
#2
In a corporation, who are the owners of the company?
Shareholders
ExplanationShareholders own shares of the corporation.
#3
Which of the following statements about stakeholders in accounting is true?
Stakeholders may include creditors, employees, and government agencies
ExplanationVarious entities such as creditors, employees, and government agencies are stakeholders in accounting.
#4
What is the primary role of government agencies as stakeholders in accounting?
To regulate and oversee business activities
ExplanationGovernment agencies oversee and regulate business activities.
#5
What distinguishes a corporation from other business entities?
Separate legal entity status
ExplanationCorporations have separate legal entity status.
#6
Which of the following business entities is characterized by unlimited liability for its owners?
Sole Proprietorship
ExplanationSole Proprietorship exposes owners to unlimited liability.
#7
What is the main advantage of a limited liability company (LLC)?
Limited liability for owners
ExplanationOwners enjoy limited liability in an LLC.
#8
Which of the following is not a characteristic of a sole proprietorship?
Limited liability for the owner
ExplanationSole proprietors have unlimited liability.
#9
What is the primary advantage of a partnership over a sole proprietorship?
Access to more capital and resources
ExplanationPartnerships can access more capital and resources compared to sole proprietorships.
#10
In a corporation, who is responsible for making major decisions and setting company policies?
Board of Directors
ExplanationThe Board of Directors is responsible for major decisions and policies in corporations.
#11
In a partnership, how are profits and losses typically shared among partners?
Based on ownership percentage
ExplanationProfits and losses in partnerships are distributed based on ownership percentages.
#12
Which of the following stakeholders has the highest priority in the event of business liquidation?
Creditors
ExplanationCreditors have the highest priority in business liquidation.
#13
Which stakeholder typically has the most influence on the day-to-day operations of a business?
Management
ExplanationManagement has significant influence on day-to-day operations.
#14
What is the primary reason for a business to choose a partnership structure over a corporation?
Tax advantages
ExplanationPartnerships are chosen for tax advantages.
#15
In a limited liability company (LLC), how are profits typically distributed among members?
Based on ownership percentage
ExplanationProfits in LLCs are distributed based on ownership percentages.