Which of the following gives the owners of the business limited liability?
d. None of the above
2. Which of the following gives priority to creditors in a dissolution?
a. A proprietorship
b. An LLC
c. A partnership
d. all of the above
3. Which statement is correct?
a. A foreign corporation is one organized in another country but does business in the US
b. A foreign corporation is one organized in one state but does business in another state
c. Any type of business entity doing business abroad is a foreign company
d. None of the above is correct
4. Which of the following is not a disadvantage of a corporate form of entity?
a. Double taxation
b. Incorporation costs
c. Accumulating or raising capital
5. Which of the following statements is not true?
a. Most states allow an easy transition from a conventional partnership into an LLP
b. Most common law and statutory law from partnership law applies to LLPs
c. LLP do not require state filings
d. All corporations are either subchapter S or C corporations
6. Which of the following is a false statement about board of directors?
a. Board members may not use corporate assets
b. Board members may not profit from the company with or without permission of the entity
c. Board members can not compete directly with the entity
d. Board members can not be board members of a competing company
7. A company’s audit committee should have at least one member considered to be a financial expert. Which of these is not an example of a financial expert?
a. Prior experience as a controller of a large corporation
b. Previous work in a public accounting firm
c. Prior experience as an internal auditor
d. A member of a professional accounting/finance association
8. Which of the following is not one of the elements of COSO Internal Control Integrated Framework?
a. The audit committee of the board of directors
b. Risk assessment
9. Which of the following is not a pass-through entity?
b. Subchapter S corporation
c. Chapter C corporation
d. General partnership
10. Which of the following is true and the best answer?
a. The board of directors provide advice to the entity
b. The board of directors monitors and oversees senior management
c. Maintains a level of skepticism
d. All of the following are true statements